Malaysia’s Solar PV Capacity to Surge Past 6.5GW by 2029, UOB Kay Hian Forecasts Amid Renewable Boom

UOB Kay Hian predicts that Malaysia's total solar photovoltaic capacity will exceed 6.5GW from 2026 to 2029.

This forecast underscores the nation's rapid shift toward renewable energy sources as part of its broader energy transition strategy.

Key Growth Drivers

Government tenders for the Large-scale Solar (LSS) 6 bidding program and the rollout of Corporate Renewable Energy Supply Scheme (CRESS) projects are fueling this expansion.

Historically, Malaysia has steadily increased solar installations through successive LSS programs and net energy metering schemes, building a strong foundation for future growth.

Lucrative Economic Impact

The projected capacity addition opens up engineering, procurement, construction, and commissioning opportunities valued at MYR 13 billion to MYR 23 billion over the next five years.

The renewable energy sector is expected to achieve a three-year earnings compound annual growth rate of 28 percent from 2026 to 2028.

Navigating Market Challenges

Solar module prices are anticipated to rise to $0.13 per watt by June 2026 from the current $0.12 per watt, driven by China's removal of VAT export tax rebates.

Raw material costs have surged, with polysilicon up 39 percent, copper 40 percent, and silver 167 percent year-on-year, pushing silver's share of module costs above 20 percent.

However, the ringgit's 12 percent year-on-year appreciation is mitigating these higher solar PV costs effectively.

Future Catalysts and Outlook

Key re-rating catalysts include further ringgit strengthening, wins in CRESS and Self-Consumption contracts, and monetization of solar assets through listings or sales.

Analysts expect Malaysia’s energy transition to maintain strong momentum into 2026 and beyond.