Malaysia Utility-Scale Solar Boom Expected in Q2 2026 as Panel Prices Drop: Kenanga Research

Kenanga Research anticipates a gradual resurgence in Malaysia's utility-scale solar activity beginning in the second quarter of 2026, fueled by significantly lower solar module prices.

Solar module costs have eased to $0.11-$0.12/W from a recent peak of $0.13/W, thanks to declining raw material prices like polysilicon, wafers, and silver.

LSS5+ Projects Accelerate Amid Cost Relief

Historically, the Large-Scale Solar 5+ (LSS5+) engineering, procurement, construction, and commissioning rollout lagged due to developers' caution over elevated panel prices following China's export VAT removal, which squeezed project returns.

Thirteen developers secured 2GWac quotas under LSS5+, unlocking a total MYR 6 billion EPCC opportunity.

To date, only 1.5 percent of EPCC value has been announced, leaving an estimated MYR 2-3 billion external market over the next 12 months to bolster sector earnings through 2028.

Commercial operation dates for these projects are targeted by end-February 2028, marking a key milestone in Malaysia's renewable push.

LSS6 and BESS Set to Drive Future Growth

The upcoming LSS6 program, aiming for another 2GW with mandatory Battery Energy Storage Systems (BESS), could generate MYR 8 billion in EPCC value—a 40-50 percent jump from solar-only setups.

Expected to launch in Q2 2026 with awards in late 2026 or early 2027, LSS6 will favor established players with robust balance sheets amid intensifying competition.

Meanwhile, the Corporate Renewable Energy Supply Scheme (CRESS) is gaining momentum after a system access charge cut to 20 sen/kWh, with 1.3GW in agreements tied to booming data centers.

Rooftop solar under the new Solar ATAP faces short-term challenges like longer paybacks but should recover in H2 2026, enhanced by mandatory BESS and falling battery costs to $100/kWh.