Malaysia

The energy-dependent Malaysian economy has developed comprehensive roadmaps and frameworks to enhance energy security, increase the utilisation of renewable energy, and safeguard sustainable energy development.

Several key policies and initiatives, including the National Energy Policy 2022-2040, the National Energy Transition Roadmap (NETR), and the Malaysia Renewable Energy Roadmap (MyRER), form the backbone of Malaysia’s energy strategy. As indicated in NETR, Malaysia aims to achieve 70% RE installed capacity and carbon neutrality by 2050, dominantly through solar PV installation. Numerous strategic initiatives and innovations are in the pipeline to expedite the nation’s ambitions for a cleaner future.

The ministry supports multiple PV programmes, including Feed-in Tariff (FiT), Net Energy Metering (NEM), Large Scale Solar (LSS), and self-consumption (SELCO). These programmes are overseen by two statutory bodies: the Energy Commission (ST) oversees LSS and SELCO, and the Sustainable Energy Development Authority (SEDA) oversees FiT and NEM. However, the state of Sarawak cannot implement these initiatives due to its own electricity supply ordinance. Meanwhile, in Sabah, the energy sector (gas and electricity supply) is governed by the Energy Commission of Sabah (ECoS).

In early 2024, ECoS reinstated the SELCO and LSS projects, designated as SELCO-PV Sabah and LSS-SABAH2024. These projects align with the Sabah Energy Roadmap and Master Plan (SE-RAMP 2024), introduced in September 2023, to enhance renewable contributions to the Sabah energy mix. The Fifth LSS, referred to as LSS-Peralihan Tenaga Suria or LSS PETRA, was initiated with a 2 000 MW quota by the Ministry of Energy and Water Transformation (PETRA) in early 2024. In addition to rooftop and ground-mounted solar projects of varying capacities, 500 MW is allocated for floating solar. The project granted for this cycle is anticipated to commence operations in 2026.

In December 2024, PETRA and ST announced the forthcoming revisions to SELCO guidelines, which will include the following enhancements: expanding installation options to encompass ground-mounted and floating PV systems, alongside rooftops; allowing PV installation systems for electricity users in the agriculture category; and abolishing the 85% capacity limit for non-domestic users. The NEM programme will also open for agricultural electricity users for PV installation, supporting both the national energy transition agenda and food security.

Financial aid, investments, incentives, and rebates were made available to encourage the adoption of solar energy to further accelerate the energy transition. In 2023, the Malaysian Investment Development Authority (MIDA) sanctioned 565 green technology initiatives valued at RM 3.2 billion, with 94% of these pertaining to solar-related projects.

Green Technology Financing Scheme (GTFS) with 1.0 billion allocation was extended until the end of 2025 or until the fund is fully utilised.

LSS Update: The LSS programme, implemented in 2016, has seen a total of 2 131.5 MW cumulative capacity awarded by the end of 2024.

FiT Update: As of 2024, the cumulative FiT capacity (biogas, biomass, WTE, small hydro, and PV) for Peninsular Malaysia and the Federal Territory of Labuan is 1 203.27 MW, of which 592.35 MW is operational. Solar PV projects are fully operational and represent the largest segment of active projects, with a total capacity of 321.4 MW.

NEM Update: Since 2016, the NEM programme has provided a cumulative quota of 2 900 MW through a series of implementations. NEM 3.0 operates across three distinct categories: NEM Rakyat, NEM GoMEn, and NOVA (Net Offsets Virtual Aggregation), with corresponding quotas of 600, 100, and 1 700 MW. By the end of 2024, 67% of NEM 3.0 quotas have been reached, with a cumulative capacity of 1 548.14 MW. Among these, 1 047.69 MW is already operational, constituting 42% industrial, 33% domestic, 24% commercial, and 1% agricultural-based projects.

As of 2024, Malaysia has achieved a 26% RE capacity mix in electricity supply, demonstrating steady progress towards low-carbon goals. The growth of the PV sector has contributed significantly to this progress.

In 2024, Malaysia achieved a total cumulative capacity of 4 374.6 MW PV, with an increase of 1 272.8 MW from 2023. The breakdown of the installations is shown in the following table and chart:

The PV sector is anticipated to see substantial expansion due to the proposed efforts outlined in the NETR, which include hybrid hydro-floating solar PV (HHFS), solar parks, and residential solar installations. Tenaga Nasional Berhad (TNB) is advancing the development of 2 500 MW at its hydropower facilities.

Longi Green Energy Technology, a Chinese solar manufacturing company, is investing RM 1.8 billion to establish a PV manufacturing facility in Serendah, Selangor. The plant is expected to produce 8.8 GW PV annually. Longi is also expanding its operations in Sarawak by investing RM 1.3 billion in a second plant with a capacity of 6 GW. Consequently, these investments will generate numerous job opportunities in the PV industry.

The government has also started the Solar for Rakyat Incentive Scheme (SolaRIS), a programme that provides rebates of up to RM 4 000 to encourage people to install PV systems in their homes. Concurrently, this incentive will lead to more people signing up for the NEM programme. The SolaRIS rebate is only applicable for applications from 1 April 2024 onwards.

Following the lifting of the ban on energy exports, the government launched Energy Exchange Malaysia (ENEGEM), a trading platform for cross-border transactions of green electricity to neighbouring countries through a bidding procedure. The trading takes place in phases, with an overall capacity of 300 MW, commencing with an initial offering of 50 MW in the first phase (end of 2024).