Malaysia’s renewable energy outlook brightens with $1.4 billion solar expansion
Malaysia’s renewable energy (RE) sector is set for strong growth, buoyed by major new solar and bioenergy initiatives
KUALA LUMPUR, Malaysia (MNTV) – Malaysia’s renewable energy (RE) sector is set for strong growth, buoyed by major new solar and bioenergy initiatives announced in the country’s latest budget, according to several research houses.
Maybank Investment Bank said the launch of the 2GW Large Scale Solar 6 (LSS6) program and an additional 300MW under the Feed-in Tariff (FiT) for biomass, biogas, and mini-hydro projects will act as major catalysts for the clean energy sector. These developments are expected to generate engineering, procurement, construction, and commissioning (EPCC) opportunities worth about $1.42 billion.
Industry players are also anticipating the inclusion of battery energy storage systems (BESS) in LSS6 to strengthen grid reliability, which could add another $470 million in EPCC potential. Maybank estimates the FiT expansion will create RE asset development opportunities worth between $470 million and $950 million.
The bank said the introduction of a carbon tax would further encourage the adoption of cleaner energy sources.
CGS International noted that Budget 2026 reaffirmed the government’s strong commitment to advancing Malaysia’s energy transition through the National Energy Transition Roadmap (NETR). The rollout of LSS6 and expanded FiT quotas “reinforce policy continuity and sustain momentum in capacity additions,” the firm said, adding that programs such as the Solar Accelerated Transition Action Program (Solar ATAP) and Corporate Renewable Energy Supply Scheme (CRESS) are helping democratize RE access.
It also cited $3.9 billion in funding commitments from government-linked companies (GLCs) and continued support from the National Energy Transition Facility (NETF) as signs of sustained public-private investment in the clean energy sector.
Phillip Capital said the new measures strengthen confidence in Malaysia’s goal of achieving 70% renewable electricity capacity by 2050. The upcoming carbon tax, expected in 2026 and initially targeting the iron, steel, and energy industries, will further accelerate decarbonization, it added.
Kenanga Research said the NETR continues to make steady progress, with the $1.42 billion LSS6 rollout ensuring continuity from previous large-scale solar programs while newer initiatives such as Solar ATAP and the NEM Rakyat scheme drive broader adoption across the country.
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