Malaysia Renewables Surge: Solar Sector Eyes Strong Recovery Amid Policy Catalysts and Energy Transition Momentum

Malaysia's renewable energy sector is leading the nation's energy transition, with analysts forecasting a robust recovery for solar despite current pricing pressures.

Solar prices have softened due to weak demand in China and high inventories, with polysilicon at 2025 lows and modules trading at $0.11–0.12 per watt.

Key Policy Catalysts Fueling Solar Revival

The Corporate Renewable Energy Supply Scheme (CRESS) is gaining momentum, enabling data centers and corporates to access renewables through third-party grid deals.

Upcoming Large Scale Solar 6 (LSS6) tender, allocating around 2GW by mid-2026, emphasizes battery energy storage systems (BESS) and floating solar to boost EPCC orderbooks.

Revisions to third-party access policies, including lower system access charges, are set to enhance project viability and speed up renewable adoption.

The government has delayed carbon tax on heavy industries like steel and energy amid global volatility, providing short-term relief while advancing the National Carbon Market Policy launched in April 2026.

Historically, late 2025 saw solar price spikes from demand front-loading, but recent corrections highlight sentiment over structural recovery, per UOB Kay Hian.

Looking ahead, over 6.5GW of solar capacity is planned through 2029, unlocking MYR 13-23 billion in EPCC opportunities toward the 40% renewables target by 2035.

BESS integration addresses solar intermittency, enabling peak-shaving to ease strain on aging thermal plants and stabilize the grid.

Analysts from RHB Investment Bank and Kenanga Research expect increased CRESS announcements and MyBEST rollout, sustaining transition momentum into 2026.

These developments promise economic boosts via jobs and investments, positioning Malaysia as a Southeast Asian leader in sustainable energy.