KUALA LUMPUR: Malaysia is set to register a rosy 9 per cent compound annual growth (CAGR) rate in the local solar energy market within the next five years.
International market survey company Mordor Intelligence for the 2024-2029 forecast period noted that the Covid-19 pandemic had slightly affected the solar photovoltaics (PV) installations in the country due to lockdown restrictions, supply chain disruptions, disruption on the solar PV production, and project implementation delays.
However, the market has now reached pre-pandemic levels, according to its findings.
Factors propelling this robust growth include the increasing investments in the renewable energy sector and the country’s efforts to shift from fossil fuel-based power generation, which are expected to drive the market during this forecast period.
However, high initial investment costs associated with solar projects are expected to hinder market growth during the study period.
Nevertheless, Malaysia aims to install 9 gigawatts (GW) of solar energy capacity by 2050.
According to the report, the country’s ambitious solar energy targets and business models, such as solar leasing, are expected to create many opportunities in the near future.
Malaysia is increasing its usage of renewable energy in tandem with the acceleration of climate change.
With the government’s efforts to encourage solar installations, the residential solar industry has shown a positive trend, and more homeowners are using solar systems.
This shows that the country is on the right track to achieve the renewable energy installed capacity target of 70 per cent by 2050.
This also means local players in the solar energy market are raring to use their strength to accrue the benefits of this gravy train.
One such home-grown player, Verdant Solar Sdn Bhd (VSSB), envisions a Malaysia that is entirely reliant on solar energy.
Since its founding in 2013, VSSB has been active in the renewable energy industry and is committed to providing high-quality solar energy services to Malaysian homes.
Chief executive officer Zeth Lim told
The Exchange Asia that the the future of solar panel usage in the country is promising.
According to the National Energy Transition Roadmap (NETR), Malaysia aims to achieve 70 per cent renewable energy by 2050.
“I believe we are on track. Solar PV remains the most encouraging segment of the National Renewable Energy landscape, showing significant growth from 4.2 GW in 2023 to a projected 56 GW in 2050. Malaysia’s CAGR for installed capacity stands at an impressive 48 per cent, expanding from 0.1GW to 2.6GW.
“Moving forward, we anticipate a shift towards systems combining solar panels with battery storage. As the prices of both panels and battery storage continue to decrease, we expect to see an increasing trend in the installation of battery energy storage systems (BESS) over the next 3-5 years,” he said.
Asked about the sentiments of commercial and industrial premises gravitating towards using solar energy, he said the high take-up rate for solar energy among these promises is primarily due to the favourable payback period.
“Businesses are keen on investing because they anticipate recouping their initial costs within a relatively short timeframe.
“Additionally, the availability of incentives for green investments further drives interest, potentially reducing the payback period to less than three years.
“Another contributing factor is the attractiveness of solar system investors’ power purchase agreements (PPAs). These agreements provide appealing terms for purchasing solar energy, making it a financially viable option for businesses,” he said.
Lim also pointed out that banks’ willingness to offer low-interest loans specifically tailored for industrial buildings looking to install solar systems plays a significant role.
Access to affordable financing makes the transition to solar energy more feasible and attractive for businesses in this sector.
“The government is supporting the industry through various initiatives, such as net energy metering (NEM) Rakyat and Nova Extension, which incentivize the adoption of renewable energy among the public and businesses. Alongside this, a framework for third-party access (TPA) and cross-border renewable energy (RE) Trading Platform will be established to facilitate renewable energy trading across borders.
“Additionally, the government is providing financial support and incentives for renewable energy projects through various financing mechanisms and encouraging corporate commitments to carbon trading and Renewable Energy Certificates (REC) through platforms like the Bursa Carbon Exchange (BCX),” Lim said.
Asked what it would take to reach the projected 56 GW in 2050, he said approximately 57GW of solar PV capacity must be installed to reach this goal.
“This translates to a potential market worth around RM 142 billion by 2050. In terms of milestones, the government anticipates installing 7GW (approximately RM17.5 billion) by 2030 and 27GW (approximately RM 67.5 billion) by 2040,” he said.
To another question on the government’s efforts to beef up the industry, he said, “First, government support. The government is working on policies encouraging banks to offer low-interest loans for solar panel installation, making it more affordable for Malaysians.
“Investments in solar infrastructure, such as grid improvements announced in the NETR, also indicate the government’s commitment to enhancing solar infrastructure, which can facilitate the adoption of solar panels.
“Moreover, Malaysia’s abundant solar resources further bolster the feasibility of adopting solar energy solutions amongst the Malaysian community. By embracing solar energy, Malaysians can bolster energy security and advance sustainability goals by reducing dependence on fossil fuels.
“Lastly, there are ongoing public education and corporate social responsibility (CSR) efforts to raise awareness and foster expertise in the solar industry. At VSSB, we consistently utilise our social media platforms to advocate for the adoption of solar energy, contributing to the broader goal of widespread residential adoption of solar panels,” Lim said.
He said his company is currently serving anchor clients like Petronas, Daikin, Bandar Utama, Dutch Lady, 99 Speedmart, and Mavisco – while it doubled its previous record set in 2022 as the largest residential solar provider in the country in a year.
According to him, in 2023, VSSB installed residential solar energy systems in over 1,300 homes across Malaysia, earning recognition through the Malaysian Book of Records.
This brings the company’s current total of served landed properties and homeowners in Malaysia to over 2300 – establishing them as the preferred provider in the region.
“With installations surpassing 9958.9kW, equivalent to RM12 million in electricity bill savings, and a total of 12,645 tonnes of CO2 prevented from polluting the atmosphere, the company is committed to providing sustainable energy solutions for residential units in the country,” said Lim.
He said Malaysian homeowners increasingly turn to solar panels, driven by rising electricity bills and a growing desire for renewable energy solutions.
This surging demand reflects a nationwide shift, with the government aiming to add 1,098MW by 2025 and another 2,414MW by 2035.
“This ambitious target aligns with the Malaysia Renewable Energy Roadmap, which envisions renewables powering 31 per cent of the nation’s energy needs by 2025, rising to 40 per cent by 2035.
He said VSSB is committed to being the catalyst for this positive change and offers affordable and efficient solar solutions with flexible financing and reliable installations, making the transition to renewable energy accessible for all Malaysians.
Apart from VSSB, other major players in the country are First Solar Inc, Canadian Solar Inc, Plus Xnergy Holding Sdn Bhd, TNB Engineering Corporation Sdn Bhd, Solarvest Holdings Bhd, JA Solar Technology Co Ltd, SunPower Corporation, Hasilwan (M) Sdn Bhd, TS Solartech Sdn Bhd and Ditrolic Energy, SOLS Energy, GSPARX Sdn Bhd, and Xnergy, particularly in the residential sector.
With so many positive sentiments for solar energy among local consumers, the solar panel industry is not just adding another spoke to the industry’s wheels. It is heralding a new sliver of hope for a greener economy and a greener Malaysia.
