Solar leads the charge as policies, investments, and regional trading platforms fuel 16 percent annual growth in renewables
Malaysia is rapidly accelerating its renewable energy (RE) deployment, targeting 30 GW of installed capacity and a 40 percent share in the national power mix by 2035. This transformation is supported by strong policy frameworks, international partnerships, and growing investor confidence, setting the country on course for a 16.2 percent compound annual growth rate (CAGR) in renewable electricity generation — from 9.8 TWh in 2024 to 51.1 TWh by 2035.
Solar PV to Dominate New Additions
According to data from GlobalData, Malaysia’s cumulative renewable capacity stood at 5.8 GW in 2025 and is projected to quintuple to 28.1 GW by 2035. This expansion will be overwhelmingly driven by solar photovoltaics (PV), which will account for more than 90 percent of new capacity additions.
Solar PV capacity is expected to grow from 4.3 GW in 2024 to 25.4 GW by 2034, reaching 28.1 GW by 2035. In contrast, other renewable segments such as biopower and small hydro will grow at a slower pace, each stabilising at around 1.5 GW by 2035. The image below shows the cumulative capacity growth of Malaysia’s energy market from 2020 to 2035.
Regulatory Momentum and Cross-Border Initiatives
Malaysia’s renewable energy ambitions are underpinned by robust policy support. The Energy Efficiency and Conservation Act (EECA), which came into force in January 2025, mandates energy efficiency standards for buildings and industrial sectors — a key step in curbing energy intensity and aligning consumption patterns with sustainability goals.
Regionally, Malaysia has launched Enegem, a cross-border green electricity trading platform, which began with a 100 MW pilot project. The initiative facilitates clean energy exchange with neighbouring countries, particularly Singapore and Indonesia, and marks a step toward a more integrated ASEAN power grid.
Investments Powering the Shift
The clean energy transition has also attracted substantial foreign investment. A notable development is the USD10 billion memorandum of understanding (MoU) signed with Saudi-based ACWA Power to support large-scale solar parks and green hydrogen facilities across Malaysia. This partnership signals growing international confidence in the country’s renewable infrastructure pipeline.
In the transport sector, the government has launched a B20 biodiesel pilot programme at Kuala Lumpur International Airport (KLIA), aiming to reduce aviation emissions and promote biofuel adoption.
Corporate Access and Decarbonisation
Malaysia is enabling corporate renewable energy procurement, allowing data centres and large electricity users to purchase RE directly. This move supports broader corporate decarbonisation efforts, aligns with ESG mandates, and creates a more flexible and competitive electricity market.
These initiatives form part of the overarching National Energy Transition Roadmap (NETR) and the Malaysia Renewable Energy Roadmap (MyRER), which aim to deliver a balanced energy transition while maintaining grid reliability and affordability.
A Regional Leader in the Making
With ambitious targets, enabling regulations, and sustained investment, Malaysia is positioning itself as a regional leader in clean energy development. The country’s progress reinforces its commitment to achieving net-zero emissions by 2050 and reflects broader efforts to decarbonise Southeast Asia’s energy landscape.
