Malaysia solar market seen reaching MYR 5.04 billion in 2026

Malaysia’s solar energy market is projected to generate about MYR 5.04 billion in 2026 as utility-scale solar, battery storage, data-centre demand and green financing accelerate. New capacity, cross-border trade and larger project pipelines are reshaping where investors see the best opportunities.

Why it matters: - Malaysia’s solar sector is moving from pure generation growth to a broader infrastructure buildout that now includes storage, grid flexibility and financing. - The shift affects developers, utilities, battery suppliers, data-centre operators and investors assessing long-term project viability. - The market is expected to become more important to Malaysia’s electricity mix as demand rises and renewable energy adoption expands.

What happened: - Makreo Research expects Malaysia’s solar energy market to generate about MYR 5.04 billion in revenue in 2026. - The forecast implies a 31.23% CAGR from 2023 to 2026E. - Malaysia’s installed solar capacity rose from 4,329 MW in 2024 to 5,777 MW in 2025, or about 33% year-on-year growth. - Annual solar additions increased from 710 MW in 2023 to 939 MW in 2024 and 1,448 MW in 2025. - PETRA announced LSS6 with 2,500 MW of solar capacity, 1,250 MW of battery energy storage system capacity and a separate 150 MW solar allocation for Bumiputera companies in Peninsular Malaysia. - The LSS6 programme is expected to mobilise about RM13 billion to RM15 billion in private investment. - DayOne signed bilateral energy-supply agreements in June 2026 with TNB Renewables and TNB Power Generation covering about 1.5 GWp of solar capacity and 2.2 GWh of battery storage in Malaysia. - Solarvest announced an EPCC role for a 690 MWp LSS5+ solar project in Larut and Matang, Perak, with a contract value of about RM1.06 billion. - Construction began in 2026 on the 300 MWac Bestari floating solar project in Selangor. - TNB Kuala Muda Solar issued RM1.05 billion of ASEAN Green Sustainable and Responsible Investment sukuk in May 2026 to part-finance a 500 MWac solar photovoltaic facility in Kuala Muda, Kedah. - Singapore’s Energy Market Authority granted conditional approval in August 2026 to two projects proposing to import a combined 900 MW of electricity from solar and battery assets in Johor.

The details: - LSS6 is expected to strengthen the role of battery energy storage in Malaysia’s next phase of utility-scale solar expansion. - Storage capability, grid flexibility, project financing, site economics and supply-chain strength are becoming more important in project evaluation. - The 100 MW and 400 MWh Santong Battery Energy Storage System in Terengganu is positioned as a large-scale, grid-connected storage project. - PETRA said the Santong project can store surplus electricity, support frequency stability and strengthen system reliability. - Malaysia’s storage deployment has not kept pace with solar capacity growth, increasing the need for solutions that manage daytime generation and improve dispatchability. - The DayOne agreements reflect demand from hyperscale data-centre operators for renewable power that is both reliable and scalable. - Malaysia’s project pipeline is expanding across both ground-mounted and floating solar, broadening deployment options for developers and investors. - The Bestari floating solar project shows how reservoirs and water bodies are being used to expand renewable capacity while easing land constraints. - Green capital-market instruments are becoming more relevant as solar and storage projects require larger pools of long-term capital. - The sukuk financing for TNB Kuala Muda Solar reinforces the role of financing structures that can support larger renewable assets while keeping projects bankable.

Between the lines: - The market is shifting from a volume story to a system-design story. - Project winners will increasingly be the ones with strong grid access, storage integration, creditworthy offtakers and financing resilience. - Johor is emerging as a strategic node because it sits at the intersection of solar investment, battery deployment, data-centre growth and potential Singapore-Malaysia power flows. - Conditional cross-border approval suggests that regional electricity trade could become an additional growth path for renewable projects, if regulatory and financing hurdles are cleared. - The combination of utility-scale solar, floating solar, storage and corporate demand suggests Malaysia is building a more diversified renewable ecosystem rather than relying on one project type.

What’s next: - Makreo Research expects Malaysia’s solar market to stay supported by rising electricity demand, renewable policy, corporate decarbonisation, utility-scale execution, rooftop adoption and more battery storage investment. - Malaysia’s electricity consumption is projected to grow about 2.3% annually to around 200 TWh by 2030. - Solar is projected to supply about 14% of Malaysia’s electricity by 2030 and 25% by 2035. - Future project development will depend more heavily on grid access, storage, offtaker quality, cost competitiveness and financing strength. - Makreo Research and Consulting says its Malaysia Solar Energy Market and Forecast to 2031 covers market performance, capacity growth, pricing, policy, competition, investment activity, regional potential and opportunities across utility, residential and commercial applications. - The company also points to solar energy reports and consulting services for organisations assessing investment, market entry or demand.