Going Solar in Malaysia in 2026? The Government Will Actually Pay You Back — Here's How

If you've ever thought about putting solar panels on your roof or building, but weren't sure if it was worth the money — this article is for you.

No engineering background needed. No finance degree required. We'll explain everything in plain language, including why 2026 specifically is the year to act.

Solar panels installed on commercial factory rooftop in Malaysia.

First, the Big Picture

Installing solar panels costs money upfront. But here in Malaysia, the government has set up a scheme that effectively gives a significant chunk of that money back to businesses — through tax savings.

These savings come from two incentives that work together. Together, they are called the Double Tax Incentive, and they can help a business recover up to 38.4% of what they spent on solar through reduced taxes. On a RM1,000,000 solar project, that's RM384,000 back in your pocket — before you've even counted a single ringgit saved on your electricity bill.

The catch? These incentives are only available until 31 December 2026.

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The Two Incentives: What Are They?

Think of these as two separate "thank you" gifts from the government for choosing to go green.

Gift #1 — GITA (Green Investment Tax Allowance)

GITA is a special tax incentive created specifically to reward businesses that invest in green technology. When your company installs solar panels, the government lets you use a portion of what you spent to reduce the amount of tax you owe that year.

Here's how it works in simple terms: if you spend RM1,000,000 on solar, GITA lets you claim 60% of that — RM600,000 — as a tax allowance. That allowance is then used to lower your taxable income, which means you pay less tax. At Malaysia's corporate tax rate of 24%, the saving works out to RM144,000 of actual savings. The only catch is the amount of incentive you claim in a single year must not exceed 70% of your statutory income for that year. However, the good news is that you have three years within which to finish claiming this incentive once approved.

Think of it like a discount on your tax bill, funded by the government, as a reward for going solar.

Good to know: Battery storage systems and EV chargers actually qualify for an even higher tier of GITA — 100% instead of 60% — meaning the savings are even bigger for those technologies.

Gift #2 — Capital Allowance (CA)

Capital Allowance is less glamorous, but just as valuable. It's a standard tax rule that applies to any business that buys equipment for their business operations — and solar panels count.

Here's the simple version: instead of treating your solar system as a one-time expense, Capital Allowance lets you write off its cost gradually over 6 years. Each year, you claim a deduction that reduces your taxable income — which means lower tax payments, year after year.

Over the full 6 years, this adds up to a total tax saving of RM240,000 on a RM1,000,000 system (assuming a corporate tax rate of 24%) .

How They Work Together: A Real Example

Here's the best part — you can claim both at the same time. They don't cancel each other out. They stack.

Let's say your company installs a RM1,000,000 solar system in 2026. Here's exactly what you can claim, year by year:

Year	GITA Tax Saving (RM)	Capital Allowance Tax Saving (RM)	Total Saving That Year (RM)	Cumulative Savings (RM)
Year 1	144,000	81,600	225,600	225,600
Year 2	—	33,600	33,600	259,200
Year 3	—	33,600	33,600	292,800
Year 4	—	33,600	33,600	326,400
Year 5	—	33,600	33,600	360,000
Year 6	—	24,000	24,000	384,000
Total	RM144,000	RM240,000		RM384,000

A few things worth noting from this table:

Year 1 is the biggest year. You receive the full GITA saving of RM144,000 all at once (provided that this amount is less than or equal to 70% of your statutory income for that year), on top of the largest Capital Allowance deduction of the 6-year period. In Year 1 alone, your combined tax saving is RM225,600 — more than a fifth of your total project cost, back in your first year.

Capital Allowance keeps paying out. Even after GITA is fully claimed, Capital Allowance continues to reduce your tax bill every year for 6 years. It quietly works in the background, saving you RM33,600 a year until the asset is fully written off.

By Year 6, you've recovered 38.4% of what you spent. That's RM384,000 returned on a RM1,000,000 investment — entirely through tax savings, entirely separate from, and on top of, the electricity bill reductions your solar system generates every single day.

That's 38.4% of your total investment returned through tax savings alone. And if your project also includes Battery Energy Storage Systems (BESS) or EV charging infrastructure, the savings go even further. Because these technologies qualify for the higher Tier 1 GITA rate of 100% — compared to 60% for Solar PV — the combined effect of GITA and Capital Allowance can potentially reduce your effective project cost by up to 48%. In other words, going solar is already a strong financial decision. Adding battery storage or EV chargers to your project makes it an even more compelling one. And on top of that, your electricity bills drop significantly from Day 1 — savings that continue for the 25+ year lifespan of the solar system.

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So Why Do You Need to Act Before 31 December 2026?

Reason 1: The incentives expire. 

GITA has only been confirmed until 31 December 2026. Once that date passes, there is no guarantee the government will offer the same deal again. Previous incentive programmes in Malaysia have ended and were not always replaced with something equivalent. Miss this window, and you may lose the chance to benefit from these tax savings permanently.

Reason 2: Solar takes time to install. 

Most people don't realise that going solar isn't a one-week job. From the initial quote and design, to paperwork, approvals, procurement, and installation — a typical medium scale industrial solar project takes 3 to 6 months from start to finish. If you wait until mid-2026 to start, you may run out of time to qualify.

And while you're waiting, your electricity bills keep climbing. Malaysia's energy tariffs have been rising steadily, and that trend is expected to continue. Every month without solar is a month of paying more than you need to.

Ready to Find Out How Much You Could Save?

At Solarlink Energy Sdn Bhd, we specialise in helping businesses and property owners across Malaysia go solar — from design and installation, all the way to guiding you through the incentive application process. We handle the paperwork so you don't have to.

Whether you own a factory, an office, a shop, or a home, we can help you figure out exactly how much you stand to save — and make sure you're set up before the 2026 deadline.

• 📧 Email us to request a free consultation

• 💬 DM us on social media

• 📱 WhatsApp us — we'll get back to you quickly

  
  

The best time to go solar in Malaysia is right now. Let's make it happen before the clock runs out.