Malaysia electricity tariff will start a new electricity pricing and updates in pricing structure starting from the first of July 2025. Here is the official announcement in this LINK.
It’s not just a price hike but it’s a major shift in how electricity usage is structured, charged, and managed. Malaysia new electricity tariff updates in 2025 will affect almost everyone in Malaysia.
This year has seen significant changes to the built environment industry including the implementation of BIM.
Why Electricity Tariff Needs Updates?
The electricity tariff change in July 2025 is part of Regulatory Period 4 (RP4), which runs from 1 July 2025 to 31 December 2027 under Malaysia’s Incentive-Based Regulation (IBR) framework.
RP4 sets the updated base tariff of 45.40 sen/kWh, introduces a component-based billing structure, and replaces the old ICPT with a new Automatic Fuel Adjustment (AFA) mechanism.
These changes aim to improve transparency, reflect actual energy costs, and encourage smarter, more efficient energy use across all sectors.
Strategic Reasons for Tariff Updates
- Fairer Pricing: The new tariff separates energy, network, and service charges so that users pay based on what they actually use.
- Fuel Cost Adjustments: A new system (AFA) adjusts prices monthly based on global fuel and currency changes, avoiding big sudden hikes.
- Smarter Energy Use: Time-of-use (TOU) rates encourage users to reduce consumption during peak hours and shift to off-peak times.
- Buildings Use the Most Power: With HVAC running all year, buildings are major energy users. The new tariff pushes for better energy management.
- Supports Green Goals: This change helps Malaysia reduce carbon emissions and move toward a more efficient, cleaner energy future.
Electricity Tariff Updates
- The new base tariff is 45.40 sen/kWh, up from 39.95 sen, an increase of around 13.6%.
- This is part of Regulatory Period 4 (RP4), which runs from 1 July 2025 to 31 December 2027.
- For domestic users the bills will no longer be based on one flat rate but it is now includes separate components:
| Component | Rate (sen/kWh) |
|---|---|
| Energy charge | 27.03 (≤1,500 kWh), 37.03 (>1,500 kWh) |
| Capacity charge | 4.55 |
| Network charge | 12.85 |
| Retail charge | RM10/month (waived for usage ≤600 kWh) |
| AFA (Fuel adj.) | Up to ±3 sen/kWh monthly (based on global costs) |
Key Additions: AFA, EEI & TOU
- AFA (Automatic Fuel Adjustment)
- Replaces the older ICPT mechanism
- Adjusts monthly based on global fuel prices and currency exchange
- Capped at ±3 sen/kWh to protect users from extreme fluctuations
- EEI (Energy Efficiency Incentive)
- For users consuming ≤1,000 kWh/month, there’s a sliding rebate of up to 25 sen/kWh
- Aims to reward energy-conscious behaviour and ease cost impact for average households
- TOU (Time-of-Use Tariff)
- Available for smart meter users
- Encourages shifting energy use to off-peak times
| Time Period | Rate (≤1,500 kWh) | Rate (>1,500 kWh) |
|---|---|---|
| Peak (2pm–10pm) | 28.52 sen/kWh | 38.52 sen/kWh |
| Off-peak | 24.43 sen/kWh | 34.43 sen/kWh |
What It Means for Building Owners and Operators
Buildings are still the largest consumers of electricity in Malaysia, mainly due to round-the-clock air-conditioning (HVAC).
But rising costs are only part of the story. This new structure is a strategic shift to change how buildings operate.
- Efficiency is no longer optional
- Data is your best tool
- Peak usage now has cost consequences
Facility managers must now:
- Track usage by time, zone, and load
- Forecast peak demand and shift loads accordingly
- Justify every operational watt used
Designing for Climate, Not Against It
Energy-saving campaigns are good. But they’re not enough. We need to design and run buildings that work with Malaysia’s hot and humid climate.
Now’s the time to:
- Integrate daylighting, insulation, and passive ventilation
- Rethink cooling strategies
- Use analytics to benchmark and optimise performance
What’s Next?
This tariff change is a tipping point for the built environment. Operational survival now depends on:
- Better design
- Smarter systems
- Faster responses
If you run facilities or manage properties, now is the time to act. Let’s build smarter, greener, and more resilient spaces.
Frequently Asked Questions
What is the new electricity base tariff in Malaysia starting July 2025?
The base tariff has been revised to 45.40 sen/kWh under Regulatory Period 4 (RP4), effective from 1 July 2025 until 31 December 2027. This tariff reflects actual generation, transmission, and service costs.
What components are included in the new electricity bill structure?
The new bill includes several components:
1- Energy charge
2- Capacity charge (demand-based)
3- Network charge
4- Retail service charge
5- Automatic Fuel Adjustment (AFA), which replaces the ICPT
How does FOX help manage rising electricity costs?
FOX provides real-time tracking and analytics of energy usage across buildings, zones, and equipment. With data visualisation and alerts, facility managers can identify inefficiencies, reduce peak demand, and make cost-saving decisions proactively.
What is the Automatic Fuel Adjustment (AFA)?
AFA is a monthly adjustment to your electricity bill that reflects changes in global fuel prices and exchange rates. It replaces the previous Imbalance Cost Pass-Through (ICPT) mechanism under the new RP4 structure.
Is FOX compatible with Time-of-Use (TOU) strategies?
Yes. FOX supports energy data tracking that helps you respond to TOU pricing by optimising usage during off-peak hours and planning preventive maintenance to align with lower tariff periods.