Reading Your TNB Bill: 2025 Tariff (RP4), AFA, and How Solar Cuts It

Solarlink Energy
3 hours ago
6 min read

Your bill got a facelift in July 2025. Here's what changed, what each line actually means, and how solar takes a swing at nearly every one of them.

If your TNB bill has looked a little different since mid-2025, you're not imagining it. On 1 July 2025, TNB rolled out RP4 (Regulatory Period 4) which is a completely restructured tariff. Gone is the old block-rate system where you simply paid more per kWh as usage climbed. In its place: a bill broken into separate, itemised charges.

Here's how to actually read it and where solar fits into all this...with BESS making a special guest appearance later on.

What's Actually on Your Bill Now

For residential (Tariff D) customers, your bill is now made up of five components:

Charge	What It Means	Rate
Energy Charge	What you pay per kWh consumed	27.03 sen/kWh (up to 1,500 kWh) / 37.03 sen/kWh (above)
Capacity Charge	Covers power plant capacity kept ready for you	4.55 sen/kWh (flat, every unit)
Network Charge	Cost of the grid delivering power to your door	12.85 sen/kWh (flat, every unit)
Retail Charge	Fixed monthly service fee	RM10/month (waived under 600 kWh)
AFA	Automatic Fuel Adjustment — moves monthly with fuel costs	Variable

WHY THE OVERHAUL?

The base tariff itself rose 14.2% under RP4, from 39.95 sen/kWh to 45.62 sen/kWh — largely driven by higher coal and gas costs. The new component structure is meant to reflect the true cost of generating and delivering electricity, rather than bundling everything into one flat rate.

What Is AFA, Exactly?

AFA (Automatic Fuel Adjustment) is the one line on your bill that isn't fixed. Introduced alongside RP4 on 1 July 2025, it replaced the older ICPT (Imbalance Cost Pass-Through) mechanism, which only adjusted tariffs once every six months. AFA does the same job of passing changes in fuel costs and foreign exchange rates on to consumers, but does it every single month instead.

Here is a table showing the AFA rates since October 2025 until December 2026.

Month	AFA Rate	Effect on Bill
October 2025	−6.50 sen/kWh	Rebate
November 2025	−8.91 sen/kWh	Rebate
December 2025	−6.42 sen/kWh	Rebate
January 2026	−4.99 sen/kWh	Rebate
February 2026	−2.77 sen/kWh	Rebate
March 2026	−2.15 sen/kWh	Rebate
April 2026	−0.47 sen/kWh	Rebate
May 2026	+1.38 sen/kWh	Surcharge
June 2026	+2.59 sen/kWh	Surcharge
July 2026	+3.59 sen/kWh	Surcharge
August 2026	+3.80 sen/kWh	Surcharge
September 2026	+3.67 sen/kWh	Surcharge
October 2026 (projected)	+3.36 sen/kWh	Surcharge
November 2026 (projected)	+2.81 sen/kWh	Surcharge
December 2026 (projected)	+5.48 sen/kWh	Surcharge

Note: October to December 2026 figures are TNB's latest published 3-month outlook, not finalised rates.

To understand the what and why behind AFA, we have to understand that Malaysia generates most of its electricity from imported coal and natural gas, so when global fuel prices rise or the Ringgit weakens against the US Dollar, the cost of generating electricity goes up and AFA reflects that on your bill as a surcharge. When fuel costs fall, AFA can instead appear as a rebate, lowering your bill. It moves in both directions depending on global market conditions that month.

WHO ACTUALLY PAYS IT

Domestic customers using 600 kWh or less per month are exempt from AFA entirely. Cross that threshold, and AFA applies. So, a household with similar usage every month could see noticeably different bill swings month to month. We also did a video on this, but for context, 600kWh is a monthly bill of around RM 300.

Because it's reviewed monthly rather than every six months, AFA makes your bill more transparent and closely tied to real-world energy costs. However, it also means your electricity bill can now genuinely change from one month to the next, even if your usage stays exactly the same!

Yes, we have gotten constructive feedback from people enquiring about solar installations now, due to this exact hike in their monthly bills.

What’s worse? It's entirely outside your control. The only thing you can do is to reduce how many units (kWh) of electricity you buy/use from TNB in the first place.

TNB Bill Tariff — The Automatic Fuel Adjustment (AFA) surcharge has increased significantly, with rates reaching **+8.94 sen/kWh in September 2026**, adding further pressure to electricity costs.

That is exactly where solar comes in (and Battery Energy Storage Systems too, but more on this in a bit).

If You Run a Business: Watch Your Maximum Demand (MD)

Commercial and industrial customers on medium-voltage tariffs face an extra, and often much bigger, charge: Maximum Demand (MD) charges.

MD isn't based on how much power you use. It's based on your single highest 30-minute power spike in the month. Read that again – as long as there is a spike recorded in ANY 30-MINUTE WINDOW of that month, you will be charged on that MD per kW for the whole month.

For users with medium-voltage TOU tariffs (previously C2 or E2 industrial tariffs), MD now costs RM98.61/kW, which is almost triple since 1 July 2025. For many factories, this is now the single largest controllable cost on the bill which can be seen in the table below.

Charge	What it Means	Rate
Energy Charge	What you pay per kWh consumed	27.33 - 31.32 sen/kWh
Capacity Charge	Generation capacity reserved for your peak demand	RM30.205/kW of MD
Network Charge	Grid infrastructure cost tied to your peak demand	RM67.645/kW of MD
Retail Charge	Fixed monthly service fee	RM200/month
RE Fund (KWTBB)	Fund used to promote growth of electricity generation from renewable energy resources	1.6% Surcharge
AFA	Automatic Fuel Adjustment — moves monthly with fuel costs	Variable

Combined MD Charge: RM98.61/kW

For businesses on the medium-voltage Time-of-Use tariff, previously known as C2 (commercial) or E2 (industrial), Capacity and Network charges (with the 1.6% on top for the RE Fund) combine into an effective RM98.61 for every kW of your monthly peak demand.

How Solar Cuts Into Every One of These

Solar doesn't just lower one line on your bill, it chips away at nearly all of them:

Energy Charge

Every kWh you generate and use yourself is a kWh you're not buying from TNB.

Capacity & Network Charges

Since these are billed per kWh consumed from the grid, reducing your grid draw reduces these too.

AFA Exposure

AFA moves monthly and is entirely outside your control. However, less grid dependence means less exposure to it.

Maximum Demand

Pairing solar with a BESS (Battery Energy Storage System) lets you shave your peak demand by discharging stored energy exactly when your demand spikes which directly attacks the RM98.61/kW charge.

SST

With the help of solar, reducing your usage to below 600 kWh per month effectively exempts you from having to pay for SST on your monthly bills.

14.2%

Base tariff increase under RP4

~3x

Rise in MD charges since July 2025

2.5–4 yrs

Typical solar payback period

THE BOTTOM LINE

RP4 was designed to charge you closer to the true cost of electricity which means your bill is now more transparent, but also more exposed to rising fuel and infrastructure costs. Solar (and, by extension, solar + BESS for businesses) is the most direct way to take control back, unit by unit, charge by charge.

For Businesses (and Homes): Why BESS Is the Missing Piece

Solar alone cuts your Energy, Capacity, and Network charges, but it can't do much about Maximum Demand for medium and high-voltage clients since MD is set by whatever your single highest power spike looks like, sun or no sun.

That's where a Battery Energy Storage System (BESS) comes in.

A BESS stores solar energy generated during the day (or cheaper grid electricity during off-peak hours) and discharges it precisely when your demand spikes. This is a process called peak shaving. Instead of drawing a costly spike straight from the grid, your battery absorbs it in a process called power augmentation. Since MD is billed on that one peak 30-minute window each month, shaving even a single spike can meaningfully lower your bill.

With MD charges having roughly tripled since July 2025, sitting at RM98.61/kW, this translates into substantial savings. For many factories and commercial premises, MD is now the single largest controllable line item on the bill, and BESS is the most direct and cost-effective tool (ROI of as low as 2 years!) available to bring it down.

SOLAR + BESS, TOGETHER

Think of solar as reducing how much you buy from TNB, and BESS as controlling when you buy it. Paired together, they attack nearly every charge on a commercial bill — Energy, Capacity, Network, AFA exposure, and Maximum Demand — rather than just one.