Malaysia Solar Energy Market Size & Share Analysis - Growth Trends and Forecast (2027 - 2032)

Market Overview

Malaysia Solar Energy Market Snapshot & Metrics Overview

Study Period	2021 - 2032
Forecast Data Period	2027 - 2032
Base Year Market Size (2026)	4.99 gigawatt
Market Volume (2027)	6.64 gigawatt
Market Volume (2032)	27.22 gigawatt
Growth Rate (2027 - 2032)	32.60 %
Market Concentration	Medium
Major Players* Canadian Solar Inc. Solarvest Holdings Berhad Plus Xnergy Holding Sdn Bhd JA Solar Technology Co. Ltd. TNB Engineering Corporation Sdn Bhd	*Disclaimer: Major Players sorted in no particular order

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• Thailand
• Trinidad and Tobago
• Turkey
• United Arab Emirates
• United States
• Venezuela
• Vietnam

Market Trends and Insights

Government LSS auction expansions

Government procurement creates a defined development pipeline that can sustain solar orders beyond individual corporate purchasing decisions. PETRA approved 13 large-scale solar projects totaling 1,975 MWac under LSS PETRA 5+ on September 2, 2025. That tender received 37 applications offering 4,073 MW against a 2,000 MWac quota, showing participation beyond the available allocation. In July 2026, PETRA announced LSS6 with 2,500 MW of solar, 1,250 MW of battery storage and a separate 150 MW solar quota for Bumiputera companies in Peninsular Malaysia. ^[1] Oversubscribed bidding makes access to an allocation selective before the delivery stage begins. The announced pairing makes storage delivery part of the LSS6 offer, extending the procurement opportunity beyond generation alone.

Declining PV module costs

Low equipment costs improve solar affordability, although the commercial benefit depends on when projects secure their supply. IEA PVPS reported that Malaysian solar PV prices remained low through most of 2025, with gradual increases emerging toward year-end. It attributed the low prices to Chinese oversupply, continued domestic production and intense competition. Those conditions improve the equipment side of a project’s investment case, making the capacity proposition more financially accessible at the point of supply. The year-end increases make procurement timing a commercial variable, so the demand benefit is strongest for projects able to secure equipment during the low-price period.

Rising corporate-PPA/RE100 demand

Corporate solar demand spans facility electricity service and separately contracted energy attributes, creating different routes for suppliers to serve an identified buyer. On May 8, 2025, Gentari Renewables, Gentari’s wholly owned subsidiary, signed solar PPAs with Telekom Malaysia covering approximately 4.3 MWp across 6 facilities. ^[2] Gentari Renewables agreed to design, install and operate the systems, giving the buyer a contracted supply arrangement. In November 2025, SM 01 Sdn Bhd achieved financial close for its 29.99 MWac Gurun project and signed a Google PPA for energy attributes, with operation scheduled for 2027. Selling electricity service at corporate premises and selling energy attributes place different delivery obligations on solar suppliers.

Data-center power demand spike (Johor & Selangor)

Data-center growth in Johor expands the electricity-demand base that solar developers can seek to serve. Wood Mackenzie reported that data-center load in Johor more than doubled from 2024 to 2025. In June 2026, it estimated Johor data-center maximum demand at approximately 3.8 GW, nearly 1.5 times the state's current electricity demand. Yondr Group, the developer, owner and operator, handed over the first 25 MW of IT capacity at its Johor data center to a client on June 5, 2025, within a 98 MW IT project. A load of that scale makes Johor a location where solar developers can pursue large electricity buyers, and the initial handover shows a campus entering client use in stages.

Grid congestion in Peninsular grid

Grid access can constrain a solar investment even when generation equipment is affordable because connection may require additional network works. In July 2025, Aurora Energy Research identified greater congestion and curtailment exposure in solar-heavy areas of Perak, Kedah, Terengganu and Pahang served by lower-voltage lines. Under Solar ATAP in Peninsular Malaysia, effective January 1, 2026, applicants bear all utility or grid-owner modification costs when technical assessment finds those works necessary. TNB commissioned its 100 MW/400 MWh Santong battery storage project on April 17, 2026, to store excess electricity and support grid stability as solar generation increases. Any network modifications identified by the assessment add applicant-funded expenditure to a rooftop project before connection.

High financing cost for rooftop SME projects

For sole proprietorships, partnerships and limited liability partnerships applying to CIMB’s SME Renewable Energy Financing-i, a rooftop solar proposal must be accompanied by business financial records. CIMB requires these applicants to supply their latest 3 years of management accounts. They must also provide their latest 6 months of bank statements, 3 years of income tax returns, and a solar PV installation proposal, agreement or contract. A solar project agreement alone leaves the application incomplete because these applicants must also document their business financial history.

*Our forecasts treat driver/restraint impacts as directional, not additive. The impact forecasts reflect baseline growth, mix effects, and variable interactions.

Malaysia Solar Energy Market Segment Analysis

Solar photovoltaic (PV) accounted for a 100% share of the Malaysia solar energy market size in 2026 and is the largest and fastest-growing segment, with a 32.6% CAGR between 2027 and 2032. IEA PVPS reported that 60 MW of LSS capacity was commissioned in 2025 through the DTU 1 and DTU 2 floating solar plants in Pasir Mas, Kelantan. With no concentrated solar power capacity in the market, supplier differentiation shifts toward delivering projects within PV rather than persuading buyers to switch solar technologies. The completed floating plants provide a delivery reference for water-based installations, allowing contractors to demonstrate execution in a specific setting while competing within the same generating technology.

PV also reaches institutional buyers through projects that spread installation work across separate government premises. By February 24, 2025, the Works Ministry had completed 5 of its 11 grid-connected PV installation projects in Malaysian government buildings. The other projects were then under construction or in pre-procurement. This mix of stages illustrates how a government-building portfolio can distribute demand across procurement, construction and handover instead of delivering capacity in a single block. Separate site schedules turn institutional portfolio execution into a coordination task beyond the handover of any single plant.

On-grid installations represented a 91.1% Malaysia solar energy market share in 2026, making this the largest segment. Single Buyer’s Corporate Green Power Programme (CGPP) participant list gives April 2, 2026 for Cenergi Solar Kuala Ketil Sdn Bhd’s 29.99 MW project connecting at 132 kV in Kuala Ketil, Kedah. This combination of generation capacity and a specified network connection illustrates the physical interface through which a solar project participates in grid supply. The specified 132 kV interface makes grid-connection engineering a concrete project task alongside supplying the solar array.

Off-grid solar is the fastest-growing segment, with a 37.5% CAGR between 2027 and 2032. In November 2025, the Ministry of Works completed and handed over hybrid solar systems at 15 rural Sarawak schools within its 121-school program. The program aimed to replace diesel generators that were costly and difficult to maintain in remote areas. This gives off-grid solar a distinct value proposition where electricity service and system maintainability form part of the same installation decision. Delivering a usable power arrangement across scattered premises makes site-level service capability an important complement to generating equipment.

Utility-scale solar was the largest segment, accounting for 48.61% of solar capacity in 2026. On June 3, 2026, TNB Power Generation Sdn Bhd and Cypark Resources Berhad exchanged an EPCC contract for a 785 MWp hybrid hydro floating-solar project and a 1,190 MWh battery system at Kenyir. The agreement brings generation and storage into the same delivery assignment, with each retaining a separate capacity basis. Coordinating the floating array’s delivery with the battery package extends the commercial scope beyond installation and creates a larger integration responsibility within one contracted project.

Residential solar is the fastest-growing segment, with a 36.1% CAGR between 2027 and 2032. PETRA launched SuRIA Home on May 22, 2026, a rebate for Malaysian individual domestic low-voltage Solar ATAP customers whose systems are successfully commissioned with TNB, excluding previous solar-assistance or rebate recipients. Claims were scheduled from June 1 through December 31, 2026, subject to earlier allocation exhaustion, first-come, first-served access and one claim per eligible individual. At launch, PETRA expected 45,000 to 50,000 homes and around 250 MW of cumulative residential rooftop capacity. Tying eligibility to commissioning makes completed household installation the commercially relevant milestone for suppliers pursuing this incentive, connecting the customer’s financial benefit to actual delivery.

Solar modules/panels formed the generating array of the 680 kWp rooftop system that TotalEnergies ENEOS commissioned at TechnipFMC’s Johor Bahru facility in July 2025. The system used more than 1,100 modules, with TotalEnergies ENEOS funding and installing it. TechnipFMC agreed to buy electricity under an 18-year PPA without upfront investment, while TotalEnergies ENEOS undertook to operate and maintain the system. Inverters (string, central, micro) provide power conversion, while the July 2026 NOVA guidelines describe smart-inverter voltage and frequency support for non-domestic participants in Peninsular Malaysia. The component proposition thus combines generation hardware with electrical functions shaped by the installation’s connection arrangement.

Mounting and tracking systems at TNB Renewables’ Kulim farm, commissioned in September 2026 with 45 MWp DC capacity and 29.99 MWac AC export capacity, involved ERS Energy as EPCC contractor and Nextpower as single-axis tracker provider. Balance-of-system and electricals include plant-site switchgear, transformers and cables, which the 2025 NEDA form separates from outside-plant interconnection facilities. Energy storage and hybrid integration under the June 2026 SELCO guidelines require non-domestic self-consumption systems above 1 MWac in Peninsular Malaysia, outside NEM and Solar ATAP, to include at least one hour of battery storage at 1 MWh per MWac, with AC or DC coupling permitted. Registered higher education institutions are exempt, and the battery requirement applied only after June 30, 2026 where installation was completed, Form G and H requirements met and licensing applications submitted by that date. These differences make mechanical design, electrical connection and storage configuration separate integration decisions within a solar installation.

Geography Analysis

Peninsular Malaysia contains distinct public-building and state-facilitated solar channels, illustrated by Selangor and the northern states. By June 2026, 70 government buildings in Selangor, including local-authority premises, had registered under the Net Energy Metering program. Penang broke ground on the Byram LSS5 farm on April 3, 2026, led by Penang Development Corporation subsidiary Solar Voltech with Solarvest as contractor and 29.99 MWp expected by July 2027. Public-premise registrations distribute potential installation work across existing buildings, whereas the Penang project concentrates development and construction around a state-linked generating site.

Johor’s development direction connects the choice of solar sites with the network infrastructure needed to integrate large renewable projects. Johor’s 2025 policy for renewable-energy development through 2030 prioritized solar farms and floating solar at identified project locations. The policy also recommended a renewable-energy grid in eastern Johor, called the Southern Johor Renewable Energy Corridor, to support large-scale renewable integration. Pairing an identified solar site with the proposed eastern network brings connection planning into the location decision, allowing developers to assess generation and integration together before committing to a generating facility.

Sabah offers a different consumer route through SELCO-PV SABAH 2.0, which includes on-site self-consumption and an off-grid PV category. Project providers can therefore address both premise-based generation and off-grid service within a state-specific program route. On September 17, 2026, developer reNIKOLA Gedong Solar (Sarawak) Sdn Bhd, a reNIKOLA Holdings subsidiary, signed a 30-year PPA with Syarikat Sesco Berhad for a planned 250 MWac facility. Syarikat Sesco Berhad is wholly owned by Sarawak Energy Berhad. Sabah’s premise-based route and Sarawak’s utility PPA call for different commercial structures, linking system delivery to an individual consumer in one case and a contracted power purchaser in the other.

Regulatory Framework and Outlook

The selected jurisdictions compare Malaysia’s federal framework for Peninsular Malaysia with Sabah’s state rules from a rooftop solar developer’s perspective. Solar ATAP participants in Peninsular Malaysia operate under program terms lasting up to 10 years from commencement. The comparison weighs the value of exported generation against the eligibility, approval and technical duties that developers must incorporate into a solar offering.

Malaysia’s High rating reflects eligible Peninsular Solar ATAP export credits based on the domestic energy charge or non-domestic average SMP. Sabah’s Medium rating reflects non-exporting SELCO economics and contractor-managed applications at all grid-connected capacities and above 5 kWp off-grid. Solar Rakyat Sabah permits bill credits for residential surplus unused because of operational constraints or monthly or seasonal demand variation during the first 12 contract years, with rollover up to 12 months. Malaysia’s No change direction rests on Solar ATAP’s terms set from January 1, 2026, while Sabah’s rests on SELCO-PV SABAH 2.0, issued March 1, 2026 to replace the 2024 guideline, and Solar Rakyat’s defined credit period, giving developers operative routes on which to base offerings.

Value Chain Stages

The value chain compares equipment manufacture, project integration and operating support by who supplies the work and how each stage earns revenue. MIDA describes Malaysia’s solar ecosystem as spanning upstream cells and modules alongside downstream electrical components and system integrators. Commercial value moves from equipment transactions to contracted project delivery and continuing service, with different capabilities and obligations at each handoff.

Solarvest said it signed a 2 GW blanket order at locked-in prices in the second half of 2025, protected by refundable deposits and bank guarantees against supplier non-performance. Such safeguards address exposure at the equipment-to-project handoff while leaving manufacturing and integration as distinct sources of supplier value. Recurring maintenance work extends the commercial relationship beyond commissioning, allowing providers that combine delivery and field support to pursue service income alongside project fees.

Key Opportunities for Market Participants

The opportunities compare rooftop self-supply, corporate procurement and community supply by how each converts buyer demand into new solar projects. Solar ATAP began on January 1, 2026, offering eligible Peninsular Malaysia TNB consumers an application route through SEDA-registered PV service providers. ^[3] The commercial choice is which consumer relationship and connection arrangement a developer can serve within the applicable program conditions.

Solar ATAP offers the clearest near-term opening for registered PV service providers serving eligible domestic and non-domestic TNB consumers in Peninsular Malaysia. Its application route places those providers directly between an interested rooftop host and the program’s submission and technical-assessment steps. Registered providers can turn an eligible host’s interest into an application for its own rooftop installation, avoiding the separate buyer-matching task required for nearby community supply.