Malaysia’s Solar Capacity Surpasses 5.7 GW After Adding 1.4 GW in 2025

Malaysia’s solar power market recorded significant growth in 2025, with the country adding more than 1.4 GW of new solar capacity during the year, according to data from the International Energy Agency’s Photovoltaic Power Systems Programme (IEA-PVPS).

The latest figures show that Malaysia’s cumulative installed solar capacity reached 5,777 MW by the end of 2025, representing strong momentum in the country’s renewable energy expansion. The total capacity includes solar installations developed under Malaysia’s major government-supported programs, including the Large Scale Solar (LSS) auction scheme, Feed-in Tariff (FiT) program, and Net Energy Metering (NEM) schemes.

According to previous IEA-PVPS data, Malaysia’s cumulative solar capacity stood at 4,329 MW at the end of 2024, indicating that the country added approximately 1,448 MW of solar capacity throughout 2025. However, the actual installed capacity could be higher, as the reported figure does not include solar installations developed outside government programs, such as certain off-grid projects.

Malaysia’s Large Scale Solar (LSS) program has remained one of the primary drivers of utility-scale solar deployment. By the end of 2025, the auction-based scheme had supported the installation of approximately 2,648 MW of solar capacity, helping accelerate large-scale renewable energy development across the country.

The latest LSS auction round was launched in January 2025, offering approximately 2 GW of large-scale solar projects with capacities ranging from 10 MW to 500 MW. In September 2025, the government approved 13 projects with a combined capacity of 1,975 MW. Data released by Malaysia’s Ministry of Energy Transition and Water Transformation later indicated that the LSS program had approved a total of 6,028 MW of solar capacity across 117 companies since its establishment.

In addition to utility-scale projects, Malaysia’s distributed solar market has also expanded through previous policy mechanisms. The country’s Feed-in Tariff (FiT) scheme contributed approximately 345 MW of solar capacity, providing fixed tariff incentives for smaller-scale rooftop solar installations before being replaced by the net-metering framework in 2016.

The country’s three rounds of Net Energy Metering (NEM) programs further accelerated rooftop solar adoption among residential, commercial and industrial (C&I), and government-sector customers. According to IEA-PVPS figures, these programs had deployed approximately 2,747 MW of solar capacity before concluding in June 2025.

Beginning in 2026, Malaysia replaced the previous NEM framework with the Solar Accelerated Transition Action Program (ATAP), a new initiative designed to support both residential and commercial solar adoption while encouraging greater self-consumption of renewable electricity.

Energy analysts from Ember, Lam Pham and Alnie Demoral, highlighted that the LSS program and the third phase of the NEM scheme were among the key contributors to Malaysia’s solar growth in 2025. They also noted that relatively high commercial electricity tariffs have improved the competitiveness of solar solutions in the commercial and industrial sector.

Looking ahead, analysts expect Malaysia’s solar deployment in 2026 to exceed the levels achieved in 2025, supported by the implementation of ATAP and the completion of utility-scale solar projects awarded under recent LSS auctions.

According to the analysts, ATAP is expected to remove previous quota limitations and expand rooftop solar adoption. Compared with NEM, the new program provides a simpler approval process but focuses primarily on self-consumption by not offering incentives for electricity exports to the grid.

Industry experts suggest that further improvements, including allowing the monetization of excess solar generation, accelerating grid connection approvals, publishing grid hosting capacity information, and reforming electricity pricing structures, could further enhance Malaysia’s solar market development.

Malaysia’s renewable energy growth is also expected to benefit from rising electricity demand from the digital economy, particularly the expansion of data centers. One of the country’s largest solar projects currently under development is a 1.5 GW solar project integrated with battery storage, designed to supply hyperscale data centers through Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS), which enables businesses to purchase renewable electricity directly from developers through the national grid.

The increasing demand from data centers highlights the growing importance of renewable energy infrastructure in supporting Malaysia’s economic development. However, the government has indicated that future data center expansion will be managed carefully due to concerns regarding increasing energy and water consumption.

With continued policy support, large-scale solar deployment, and growing demand from commercial and digital sectors, Malaysia is expected to remain one of Southeast Asia’s most dynamic solar markets in the coming years.