As Malaysia accelerates toward its 70% renewable energy capacity target by 2050, businesses across the country are under increasing pressure to demonstrate genuine commitment to clean energy. One of the most credible and globally recognised tools available to them is the Renewable Energy Certificate, or REC.
Whether your goal is to meet ESG reporting requirements, fulfil RE100 commitments, or simply support Malaysia’s green energy transition, RECs offer a flexible way to back renewable energy without necessarily installing solar panels yourself. This guide walks you through how RECs work in Malaysia, how to buy or generate them, and how they fit into a broader sustainability strategy.
But Malaysia’s energy landscape has changed significantly over the years. New schemes have emerged, old ones have evolved, and many people are now confused about what FiT actually is, whether it still applies to them, and what they should be doing instead.
This guide breaks it all down in plain language so you can understand Malaysia’s Feed-In Tariff, how it shaped the solar industry, and what the current options look like for anyone looking to go solar today.
What Is a Renewable Energy Certificate (REC)?
A Renewable Energy Certificate is a market-based instrument representing the environmental and social attributes of one megawatt-hour (MWh) of electricity generated from a renewable source like solar, wind, hydropower, biomass, or biogas.
In simpler terms, when 1 MWh of clean electricity is produced and fed into the grid, one REC is created and issued. Owning that REC gives you the legal right to claim the use of renewable energy, even if the physical electricity flowing through your wires came from a mix of sources.
Bundled vs Unbundled RECs
There are two main ways to acquire RECs in Malaysia:
Bundled RECs are sold together with the physical electricity supply. This typically takes the form of TNB’s Green Electricity Tariff (GET) programme, where you pay a green premium on top of your regular bill and receive RECs that confirm your electricity was sourced from renewable generation. No rooftop solar installation required.
Unbundled RECs are sold separately from the physical electricity. You buy the certificate as a standalone product to offset your existing electricity consumption on paper, regardless of where your physical power actually comes from. This is often more flexible and cost-effective for businesses with specific volume needs.
Why Businesses Buy RECs
Companies purchase RECs for a range of reasons that go beyond simple environmental goodwill:
- ESG and sustainability reporting — RECs satisfy criteria for international frameworks including RE100, the Science Based Targets initiative (SBTi), CDP, and the GHG Protocol.
- Scope 2 emissions offset — RECs are widely recognised as a legitimate way to reduce a company’s reported Scope 2 (purchased electricity) emissions.
- Brand reputation — Demonstrating renewable energy use strengthens stakeholder confidence and supports green branding initiatives.
- Supply chain compliance — Multinational parent companies and overseas customers increasingly require their Malaysian operations or suppliers to demonstrate renewable energy sourcing.
REC vs Carbon Credit: What’s the Difference?
These two instruments are often confused. Here’s a quick comparison:
Feature | Renewable Energy Certificate (REC) | Carbon Credit |
What it represents | 1 MWh of renewable energy generated | 1 tonne of CO2 emissions reduced or removed |
Source | Solar, wind, hydro, biomass | Forest projects, methane capture, energy efficiency, etc. |
Primary use | Claim renewable energy use, offset Scope 2 emissions | Offset overall carbon emissions |
Malaysian platform | malaysia Green Attribute Trading System, BCX | Bursa Carbon Exchange (BCX) |
In short: RECs are about renewable electricity, while carbon credits are about emissions reduction.
How to Buy RECs in Malaysia
Businesses have several pathways for purchasing RECs:
- mGATS — The official national platform operated by TNB for mREC transactions
- Bursa Carbon Exchange (BCX) — Provides transparent pricing and centralised trading for RECs
- Licensed brokers and renewable energy providers — Suitable for businesses wanting tailored REC sourcing strategies
When purchasing, always verify that RECs are issued by recognised authorities like SEDA Malaysia and traceable through approved registries. This ensures legitimacy for ESG reporting and compliance purposes.
Generating Your Own RECs with Solar
While buying RECs is one path, the most impactful approach is to generate your own. By installing a solar PV system at your business premises, you not only reduce your electricity bills but can also register your generation to produce RECs, which can be retained for your own ESG claims or sold as an additional revenue stream.
Combining solar self-consumption under Solar ATAP with REC generation (for self consumed portion) gives your business a triple benefit: lower electricity bills, real renewable energy use, and verified green credentials. For commercial and industrial businesses, this approach delivers stronger ESG outcomes than simply purchasing unbundled RECs from third parties.
If your business wants to go further by maximising self-consumption and protecting against AFA fluctuations, pairing solar with a Battery Energy Storage System (BESS) is increasingly popular. Zero-CAPEX models like PPA and CRESS, covered in our zero-CAPEX solar guide, make this even more accessible without upfront investment.
RECs as Part of Your Sustainability Strategy
RECs have become an essential tool in Malaysia’s clean energy transition, offering businesses a credible and internationally recognised way to demonstrate renewable energy commitment. Whether you choose to purchase RECs through mGATS, trade them on the BCX, or generate your own through rooftop solar, the path forward is clearer than ever.
For businesses serious about long-term sustainability, the most powerful strategy combines real renewable energy investment with REC ownership. AQ Energy can help you design a commercial and industrial solar solution that delivers both cost savings and verifiable green credentials.
WhatsApp AQ Energy today to explore how solar plus RECs can power your sustainability goals.
- Interested in installing solar panels for your home? Check out our Solar Panel for Home page
- Want to know more about solar solutions for business, commercial or industrial? Check out our Solar Panel for Business page to get started.
Frequently Asked Questions (FAQs)
A. How much renewable energy is one REC equal to?
One REC represents 1 megawatt-hour (MWh) of renewable energy generated, which is equivalent to 1,000 kWh. So if your business consumes 50,000 kWh of electricity in a year, you would need to buy 50 RECs to claim 100% renewable energy use.
