The Ministry of Energy and Natural Resources of Malaysia (KeTSA) has set ambitious targets to achieve 31% renewable capacity by 2025 and 40% by 2035. According to the National Energy Policy (2022-2040), the government aims for an 18.4 GW renewable capacity by 2040. Currently, renewables account for 13.3% of Malaysia’s total energy capacity. Based on the current growth trend, Malaysia is projected to reach 18.2% renewable capacity by 2025 and 36.4% by 2035, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, “Malaysia Power Market Size, Trends, Regulations, Competitive Landscape and Forecast, 2024-2035,” highlights Malaysia’s rich untapped renewable energy potential. With a growing population and increasing power demands, Malaysia is focusing on clean energy to ensure energy security and address climate change concerns.
Sudeshna Sarmah, Power Analyst at GlobalData, commented, “In 2016, Malaysia’s energy commission Suruhanjaya Tenaga (ST) introduced a large-scale solar (LSS) program with a total quota of 1,250 MW allocated for the 2017-2020 period, which accelerated the growth of grid-connected PV systems. Moreover, the Net Energy Metering program has spurred the distributed renewable energy market.”
Currently, Malaysia utilizes solar PV, biopower, and small hydro as its primary renewable sources. In 2015, Malaysia initiated a 30 MW geothermal power project in Tawau, which was later abandoned. The country has only one small onshore wind plant with a capacity of 0.2 MW due to unfavorable wind speeds during off-seasons, but several small wind projects are still considered viable.
The Malaysian government has extended the Green Investment Tax Allowance and Green Income Tax Exemption until 2023 to prioritize green energy. Additionally, an extension to the income tax exemption (ITE) for solar leasing companies was announced, valid until December 2026, to encourage participation in the Net Energy Metering Scheme (NEM).
Sarmah concluded, “The government has Feed-in Tariffs (FiT) for up to 1 MW capacity and Net Metering policies to promote renewable adoption. Strong policies and encouraging foreign investments for large-scale renewable projects could propel the country towards achieving its renewable energy goals.”
