RP4 Tariff Reform Can Spur Behavioural Change, Accelerate Energy Transition — Expert

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, June 24 (Bernama) -- Malaysia’s Regulatory Period 4 (RP4) electricity tariff restructuring can serve as a powerful tool to promote behavioural change and accelerate the country’s low-carbon agenda, if paired with smart technologies, targeted financial incentives, and inclusive support mechanisms, an energy expert said.

Associate Professor Dr Mohamad Fani Sulaima of Universiti Teknikal Malaysia Melaka said the recently introduced tariff reform, particularly the Time-of-Use (TOU) mechanism and the Automatic Fuel Adjustment (AFA) regime, must be complemented by broader efforts to make energy efficiency more accessible and actionable for all households.

He said that while initiatives like the “Insentif Cekap Tenaga” lay a good foundation, their long-term success depends heavily on public awareness and affordability, especially for lower-income groups who may face high upfront costs for energy-efficient appliances.

“Integrating zero-interest financing options and engaging local institutions such as state assemblies, municipal councils, and universities can help drive behavioural change.

“These channels are crucial for building trust and delivering targeted outreach,” he said in a written response to Bernama.

On the TOU tariff system, Mohamad Fani said its effectiveness hinges on enabling consumers to make real-time decisions through automation and behavioural nudges.

“Smart home technologies, energy management platforms, and mobile alerts that notify users of tariff changes can significantly improve responsiveness. 

“Rebates for shifting usage to off-peak periods can further encourage smarter energy choices without compromising comfort,” he said.

He added that tools like the MyTNB app should be upgraded beyond mere informational use, evolving into interactive energy management platforms offering real-time data, efficiency tips, and peer comparisons to support informed decisions.

Touching on the equity implications of the new tariff, Mohamad Fani said large households—especially those with unavoidable energy needs—may be disproportionately impacted by a flat rate structure.

“A more equitable approach would be to introduce social weighting in rebates or tariff tiers that consider household size or special needs. 

“With proper education and support, larger households can benefit from TOU by managing energy loads more efficiently,” he said.

He also stressed the importance of safeguards to prevent the exacerbation of energy poverty in rural and underserved communities.

He said lifeline tariffs, targeted subsidies, and infrastructure investment must go hand in hand with pricing reforms, alongside efforts to bridge digital exclusion.

From an energy transition standpoint, Mohamad Fani said dynamic pricing models such as the AFA can promote cleaner consumption patterns when aligned with renewable energy sources like solar.

“AFA helps shape demand and supports peak shaving, particularly when integrated with battery storage systems. It strengthens both grid stability and the investment case for renewables, contributing to National Energy Transition Roadmap targets,” he said.

However, he cautioned that current tariff signals alone may not be strong enough to drive rooftop solar adoption due to unattractive net metering rates and slow permitting processes.

“Guaranteed export rates and streamlined approvals are needed to empower more households and businesses to participate in the energy transition,” he said.

Mohamad Fani also called for inclusive financing models such as microloans, pay-as-you-save schemes, and community solar initiatives to help low-income groups and small and medium enterprises in adopting clean technologies.

“To support the RP4 regime, we must also implement complementary policies such as subsidies for efficient appliances, mandatory energy audits, and green building standards, many of which are outlined under the Energy Efficiency and Conservation Act 2024,” he added.

He said these efforts, backed by public-private partnerships, can help ensure the energy transition is just, inclusive and aligned with Malaysia’s net-zero emissions target by 2050.

-- BERNAMA