Malaysia’s Solar Ambition Is About More Than Clean Energy — It Could Also Protect Against Rising Power Costs

Malaysia’s energy transition strategy is placing solar power at the centre of its future electricity system.

Under the National Energy Transition Roadmap (NETR), Malaysia aims to reach:

70% renewable capacity by 2050

with solar expected to become the dominant renewable source, while natural gas is positioned as a transitional fuel to move the power sector away from coal.

However, the current pathway could leave Malaysia exposed to another challenge:

Dependence on gas may simply replace dependence on coal.

⚡ Renewable capacity is rising — but gas could remain significant

Based on NETR data, Ember estimates that by 2050:

🌱 Renewables could account for around 52% of electricity generation

🔥 Gas could still represent around 48%

This means that even with substantial renewable deployment, Malaysia's power sector could remain exposed to:

→ Global gas price volatility

→ Domestic natural gas reserve depletion

→ Potential increases in electricity costs

The implication is that Malaysia may need to go beyond its existing renewable ambitions and build a more diversified power mix.

☀️ Solar could become Malaysia’s most important domestic energy resource

Malaysia has significant solar potential, and solar generation can closely match the country's daytime electricity demand.

This creates an opportunity to reduce reliance on fossil-fuel generation during daylight hours.

The challenge comes after sunset.

As solar generation declines, Malaysia will need other flexible resources to meet demand.

This is where:

Hydropower + BESS

could become increasingly important.

Hydropower can provide flexibility during non-solar hours, while battery energy storage systems can help shift excess daytime solar generation toward periods of higher demand.

🔋 BESS is becoming a critical part of the solar equation

Rapid solar deployment also creates a new infrastructure requirement.

The more solar capacity Malaysia adds, the more important it becomes to manage:

Solar generation → Grid balancing → Peak demand → Energy storage

BESS therefore should not simply be viewed as an additional technology attached to solar projects.

It could become an important piece of Malaysia’s wider electricity infrastructure.

However, storage remains relatively expensive, meaning that large-scale deployment will require supportive policies, investment and continued improvements in system economics.

At the same time, increasing solar penetration will require:

→ Grid upgrades

→ More flexible generation

→ Energy storage

→ Better power-system management

Without these investments, the ability of the grid to absorb rapidly increasing solar generation could become a constraint.

💰 Solar could also become an affordability strategy

The benefits of solar extend beyond decarbonisation.

Increasing the share of domestically generated solar power could help Malaysia reduce its exposure to fluctuations in international fossil-fuel prices.

This could provide a degree of protection against future increases in electricity tariffs driven by:

Global fuel prices + Gas dependency + Supply uncertainty

In other words:

More solar could mean greater protection against future energy-cost volatility.

This makes renewable deployment increasingly relevant not only to Malaysia's climate targets, but also to energy affordability and energy security.

🌏 The next challenge: Peninsular Malaysia, Sabah and Sarawak

Malaysia's energy transition will not necessarily follow the same path across the country.

The source highlights the importance of supporting solar and BESS deployment across:

🇲🇾 Peninsular Malaysia

🇲🇾 Sabah

🇲🇾 Sarawak

Each region has different power-system characteristics and renewable resources.

A more regionally tailored approach could allow each market to maximise its solar potential while contributing to Malaysia's national transition objectives.