A practical guide to understanding solar investment payback
Investing in residential solar can feel like a big step — but how do you know if it’s worth it? This guide breaks down how to calculate your return on investment (ROI) for home solar systems in Malaysia, using real-world numbers and government programs like NEM 3.0.
Step 1: Understand Your Initial Investment
Your total system cost depends on the size of your installation.
A typical 4kW system might cost RM20,000 for a small-to-medium home.
✅ If you choose a zero-upfront plan, your capital cost could be RM0, shifting ROI analysis to monthly savings vs. repayment.
Step 2: Estimate Your Monthly Savings
Malaysian households spend around RM250–RM500/month on electricity.
With solar, you can offset up to 75% of your bill, depending on your usage and roof potential.
👉 Example:
Monthly bill before solar = RM400
After solar = RM100
Monthly savings = RM300
Step 3: Factor in Rebates (NEM 3.0)
Under Net Energy Metering, excess energy is sent to the grid for credit.
This further boosts ROI and shortens your payback period.
🧾 Bonus: Rebates under the NOVA program for peak demand reduction can increase total annual savings by RM1,000–RM2,000.
Step 4: Calculate Payback Period & ROI
Let’s say:
- Total system cost = RM20,000
- Monthly savings = RM300
- Annual savings = RM3,600
🧮 Payback Period = RM20,000 ÷ RM3,600 ≈ 5.5 years
📈 ROI (over 25 years) = (RM3,600 × 25 – RM20,000) ÷ RM20,000 ≈ 350%
This means you can triple your investment over the system’s lifespan.
Step 5: Include Maintenance & Warranty
Solar panels typically come with 25-year warranties and minimal maintenance.
Inverters may require replacement after 10–15 years (~RM3,000–RM5,000).
💡 Include these costs in your long-term ROI projection to get a clearer picture.
Summary
Solar isn’t just about going green — it’s a smart long-term investment.
With predictable electricity savings, government support, and minimal upkeep, most Malaysian homeowners break even within 5–7 years and enjoy decades of free solar power after.
📩 Ready to calculate your exact ROI?
Get a personalized solar assessment from HOMI today.
