Budget 2027 and Green Energy: Tax Allowances, Solar and Grid Money Explained

Budget 2027 does not have one big green headline. It has a set of tax, solar and grid measures that add up, and several of them reward businesses that can prove what they use and what they save.

The tax allowance most firms can use

The budget enhances and extends two investment tax allowances until 31 December 2030:

• up to 100% for green and sustainable technology projects and EV charging station projects, and
• up to 100% for companies that buy green technology assets for their own use.

For a factory or commercial building, the second one matters most. Solar panels, efficient chillers and energy management systems may fall under it, subject to the qualifying lists and approval.

Solar, storage and the grid

• RM1.5 billion for a centralised solar farm serving government buildings.
• 150MW of Large Scale Solar 6 (LSS6) allocated to Bumiputera companies.
• UEM Lestra is investing RM1 billion in an energy storage project at KLIA and a 1GW hybrid energy project in Johor.
• RM1 billion KWAP Climate Fund for renewable energy and decarbonisation projects.
• TNB is investing RM15 billion to strengthen the national grid.

Smaller measures for homes and villages

Nur Madani gives rebates of up to RM200 on energy-efficient air conditioners and refrigerators. RM3.3 billion goes to rural infrastructure, including street lights, clean water and electricity, and TNB is installing solar street lights in villages and rooftop solar on welfare homes and places of worship.

What this means if you run a plant, factory or building

Incentives reward evidence. To claim an allowance, apply for green financing or answer a buyer’s sustainability questionnaire, you need numbers: what you used before, what you installed and what changed.

Most businesses can’t produce those numbers today because they only see one electricity bill a month. Three steps fix that:

1. Meter by machine or floor with clamp-on sensors, so you know where the energy goes.
2. Set a baseline over a few weeks before you buy anything new.
3. Track performance after the change. If you already have solar, compare actual output with what the weather says you should get. Dirty panels and failed strings can cost output for months before anyone notices.

That is the work we do under energy and sustainability solutions, and it is the data your accountant and your bank will ask for.