Malaysia Solar Energy Market

What is the Malaysia Solar Energy Market Size?

As per the survey report on Malaysia solar energy market, the market is expected to foresee a CAGR value of 18.6% during 2026-2036, and further generate a market size of USD 2680.3 million by the end of 2036. In 2025, the market size was value at USD 625.4 million revenue.

• The Malaysia solar energy market’s growth is driven by strong government targets.
• KDMI analyst’s growth analysis foresees high initial investment as restraint for Malaysia solar energy market.

Malaysia Solar Energy Market Analysis

Solar energy is a radiant light and heat harnessed from the sun, functioning as a clean, renewable, and abundant power source. It converts stored energy into usable electricity or heat using technologies like photovoltaic (PV) panels and solar thermal systems. It reduces reliance on fossil fuels and decreases greenhouse gas emissions. The Malaysia solar energy market is characterized due to strong government policy frameworks, rising electricity demand, and increasing adoption of renewable energy across commercial, industrial, and residential applications. The country is taking important steps to ensure more secure, clean, and affordable energy source for upcoming future. From the short term to 2030, the Malaysian government has approved USD 26 million investment to expand solar PV capacity, electric vehicle charging infrastructure, and renewables direct-use supply. Moreover, rapid urbanization and adoption of automation in industrial sectors is further accelerating deployment of solar energy across the nation.

Malaysia Solar Energy Market Growth Drivers and Restraints

Growth Drivers

• Strong government targets and policy support – Malaysia’s strong regulatory standards and stringent carbon emissions are key factors driving solar energy market. Recently, the country has implemented new energy efficiency regulations like Energy Efficiency and Conservation Act (EECA), which was put into effect from January 2025. As part of it, the country aims for 31% of renewable energy, increasing to 70% by 2050. This is positioning solar as a cornerstone of the digital transition across the nation. Further, the adoption is accelerated by the introduction of government’s multiple supportive mechanisms like Net Energy Meeting (NEM) scheme, which allows consumers to regulate electricity bills through rooftop solar generation. Moreover, rising investments from businesses to procure solar energy directly through purchase power agreements, encourages private sector to participate in solar infrastructure development. This improves overall project viability and creates a strong demand for solar installations.
• Rising electricity demand and industrial growth – Rapid economic development, urbanization, and expanding industrial base are key factors contributing to the growing need for electricity, which drives Malaysia solar energy market. According to IEA report, electricity consumption per capita was 83% between 2000-2023. Total electricity produced in the country was 192,986 GWh as of 2023. Further, sectors such as manufacturing, electronics, and data centers are energy-intensive and are increasingly shifting to solar power to manage rising electricity costs and enhance overall energy security. Solar energy, especially rooftop and captive installations, offers businesses a practical solution to reduce dependence on grid electricity while achieving long-term cost savings. Furthermore, the integration of solar power into industrial operations aligns with corporate sustainability goals and environmental regulations, making it an attractive option for both local enterprises and multinational companies operating in the country.

Restraints

• High initial investment costs – The significant requirement of upfront investments for rooftop solar system can be a key barrier for residential and small commercial users. This limit widespread adoption for cost-sensitive applications, which can slowdown overall market expansion.
• Dependence on imported components – As the country relies heavily on imported solar panels and related components, which directly results in higher operational costs and import duties. This can lead to supply chain disruptions, currency fluctuations, and price volatility that further reduces market potential across the Malaysian markets.

Malaysia Solar Energy Market Segmentation

Our experts at KD Market Insights have segmented the Malaysia solar energy market research report as:

Analyst’s Observation on Malaysia Solar Energy Market Recent Developments

Over the years, the experts at KD Market Insights have been observing the recent developments associated with Malaysia solar energy market trends. Our expert’s market forecast analysis has recorded the market players adopting plentiful of key strategies including new product launches, mergers & acquisitions, and collaborations.

Malaysia is taking a major step toward reshaping its energy sector by reducing its reliance on coal and moving toward a mix of solar and nuclear power. Malaysia is expected to increase its solar capacity to more than 6.5 gigawatts between 2026 and 2029. This growth is opening up large opportunities for engineering, procurement, and construction companies, with project investments likely to run into millions of dollars.

Solarvest Holdings Berhad is strengthening Malaysia’s energy system as traditional energy markets continue to face uncertainty and price fluctuations. The company, known for its clean energy solutions in the ASEAN region, is focusing on expanding large-scale renewable energy projects to improve energy security and stability. The solar power plant will have an installed capacity of 690 megawatt-peak (MWp), making it one of the biggest solar PV farms in the ASEAN region.

Malaysia Solar Energy Market Competitive Landscape

Some of the significant participants who top the Malaysia solar energy market growth:

• JA Solar Technology Co., Ltd
• Solarvest Holdings Berhad
• TNB Engineering Corporation Sdn. Bhd
• Canadian Solar, Inc
• Plus Xnergy Holding Sdn. Bhd
• Verdant Solar Holdings Berhad
• First Solar Malaysia Sdn
• SunPower Corporation
• Ditrolic Energy
• Hasilwan (M) Sdn Bhd