As sustainability and ESG (Environmental, Social, Governance) become top priorities in corporate strategy, many industrial and commercial players in Malaysia are turning to Renewable Energy Certificates (RECs) to strengthen their green credentials. But what exactly are RECs, and how can your business benefit from them?

What Is a REC?

A Renewable Energy Certificate (REC) is a tradable proof that 1 MWh (1,000 kWh) of electricity has been generated from a renewable source like solar, wind, or hydro and fed into the grid.

When you install a solar PV system at your industrial facility, not only do you save on your electricity bill, but you also generate clean energy, which qualifies you to earn RECs. These certificates can then be retired (for your own ESG claims) or sold (to companies seeking to offset their carbon footprint).

How RECs Work in Malaysia

In Malaysia, RECs are typically managed through international registries such as the I-REC Standard (International REC), which is globally recognized and trusted by corporations and sustainability frameworks such as CDP, RE100, and GHG Protocol.

Here’s how it works:

• You install and operate a solar PV system.
• Your system is registered and verified by an approved issuer (like TNBX or other I-REC authorized entities).
• For every 1 MWh of electricity you generate, you receive 1 REC.

These RECs can be:

• Retired to prove your renewable energy usage.
• Traded or sold to other companies or on voluntary markets.

Why Should Industrial Companies Care?

Enhance ESG and Carbon Reporting
RECs are recognized proof of renewable energy usage. For companies reporting under ESG frameworks or ISO 14001, RECs provide a credible way to demonstrate emissions reduction and climate action.

Monetize Surplus Green Value
Even if you’re using all the energy on-site (SELCO model), you can still earn RECs. Selling them on the market can generate additional revenue, typically RM30–RM50 per REC, depending on market demand.

Attract Investors and MNC Clients
Multinational corporations are demanding sustainability from their supply chain. Having RECs in your ESG portfolio makes your company more attractive for partnerships, funding, or compliance with international standards.

Support Malaysia’s Renewable Goals
By participating in REC markets, you’re directly contributing to Malaysia’s energy transition and climate targets.


Example: RECs From a 1.5MWp Solar PV System

• Let’s say your factory installs a 1.5MWp solar system, which produces approximately 2,040,000 kWh (2,040 MWh) annually. That means:
• You earn 2,040 RECs per year
• If sold at RM40 per REC, that’s RM81,600 in potential yearly revenue
• Or you can retire those RECs for ESG reporting and carbon neutrality claims

What to Consider Before Getting Started

• Is your system eligible for REC registration (must follow technical and documentation standards)?
• Will you sell or retire your RECs?
• Who will handle your REC registration, verification, and trading?

Final Thoughts

Installing solar is no longer just about reducing your electricity bill—it’s about tapping into the full financial and environmental value of renewable energy. RECs are a smart way for industrial companies to gain recognition, generate new revenue, and stay ahead in a sustainability-driven world.

If your business is already generating renewable energy or planning to, don't leave RECs on the table.