Renewable Energy Development in Malaysia
Malaysia ranks fourth in renewable energy installed capacity among ASEAN countries and is the third-largest solar photovoltaic (PV) market in the region. The solar market in Malaysia is expected to grow at a compound annual growth rate (CAGR) of over 9% during the forecast period. As part of its commitment to sustainability, Malaysia is formulating a long-term low-emission development strategy to achieve net-zero greenhouse gas emissions by 2050. The country recognizes the critical role of renewable energy in meeting sustainable development goals and reducing carbon emissions, with a particular focus on advancing the solar industry.
Solar Market Growth and Challenges
A senior executive in Malaysia's photovoltaic induMstry noted that solar panel prices have halved and are expected to remain low for the next two years. As the world's third-largest producer of solar panels, Malaysian manufacturers are slowing their expansion plans to adapt to lower demand and prices. The reduced prices are driving global solar project installations, with Chinese solar panels accounting for 80% of global consumption. A 42% drop in production costs last year has given Chinese manufacturers a significant competitive edge over their counterparts in Europe and the U.S. Despite efforts by the Biden administration to provide tax credits for U.S. solar manufacturing, China's dominance in the global supply chain remains unchallenged. Davis Chong, President of the Malaysian Photovoltaic Industry Association, emphasized that the solar supply chain will continue to follow the principles of supply and demand and economies of scale, with China maintaining its leading position.
Malaysia's Energy Transition and Policy Efforts
Despite being a major solar panel producer with abundant sunlight, Malaysia's transition to renewable energy has been slow. The country's energy mix remains heavily reliant on coal and natural gas, with renewable energy accounting for only a small fraction of electricity production. This places Malaysia behind other Southeast Asian nations in renewable energy adoption. The International Renewable Energy Agency (IRENA) has warned that Malaysia urgently needs to increase investments in renewable energy to meet its international climate commitments.
Under the leadership of Minister Nik Nazmi Nik Ahmad, Malaysia's Ministry of Natural Resources, Environment, and Climate Change is accelerating the country's shift toward renewable energy. However, challenges persist due to Malaysia's dependence on fossil fuels and its status as an oil-exporting nation. To boost renewable energy capacity, the ministry is considering lifting the ban on renewable energy exports, particularly to Singapore. This strategy has sparked debates among industry stakeholders about its potential benefits and drawbacks.
Ambitious Renewable Energy Targets
Malaysia has set ambitious renewable energy targets, aiming to increase the share of renewables in the national energy mix to 31% by 2025 and 40% by 2035. By 2050, the country's solar installed capacity is projected to reach 4,706 MW, with a significant portion expected to come from rooftop installations on residential and commercial buildings. Government policies will play a crucial role in creating a favorable environment for solar development, with cost being a key consideration for homeowners. In Malaysia, the cost of installing solar panels varies based on roof size and property type, ranging from an average of RM 45,000 (for terrace houses) to RM 95,000 (for bungalows). These prices, often referred to as "solar panel Malaysia price" or "harga solar panel," are critical factors influencing adoption rates.
Inclusive Renewable Energy Initiatives
Experts emphasize the need for government policies that ensure access to renewable energy for all Malaysians, including those in rural or underserved areas. Incentives and subsidies for renewable energy projects in these regions can accelerate the transition to a more sustainable energy system, driving increased sales and installations of solar panels. However, financing solar PV installations remains a challenge for individuals due to a lack of awareness among banking institutions about the industry's risks and responsibilities.
To address this, the Malaysian government launched the Green Technology Financing Scheme (GTFS) in 2010, allocating RM 1.5 billion to fund green projects. Companies obtaining bank loans under this scheme receive a 2% interest subsidy, with the government providing a 60% guarantee for approved loans. Additionally, the government offers green investment tax allowances (GITA) and green income tax exemptions (GITE) to encourage corporate participation in green projects. However, these incentives are largely inaccessible to individual or household investors, highlighting a gap in Malaysia's green financial support system.
Industry Efforts and Public Awareness
Local companies in Malaysia's solar industry are actively working to overcome barriers to solar adoption. From innovating technologies and advocating for policy reforms to forming strategic partnerships and engaging in community outreach, these companies are making solar energy more visible and accessible to the public. Solar solutions provider Verdant Solar believes that increasing public awareness of the economic and environmental benefits of solar energy is crucial. Market education can help the public understand how solar technology contributes to economic growth, job creation, and energy security.
Investments and policy support for the solar industry can bring significant economic benefits to Malaysia, including job creation and economic diversification. Widespread adoption of solar energy will reduce carbon emissions, enhance energy security, and pave the way for a more sustainable future. Despite the challenges, the combined efforts of the government, industry stakeholders, and local communities promise a bright future for Malaysia's solar market. As the "solar panel Malaysia price" and "harga solar panel" continue to play a pivotal role in adoption rates, ongoing support and innovation will be key to achieving the country's renewable energy goals.