Why Malaysia’s LSS6 Could Unlock RM13–23 Billion in Solar and BESS Opportunities

Malaysia’s renewable energy sector is entering another phase of accelerated growth following the launch of the Large Scale Solar 6 (LSS6) programme, with analysts expecting the record-sized tender to create substantial opportunities for solar engineering, procurement, construction and commissioning (EPCC) companies.

The LSS6 programme is expected to strengthen order-book visibility for renewable energy developers and contractors over the next several years, while further supporting Malaysia’s long-term energy transition. Research houses have highlighted the programme’s larger-than-expected capacity allocation and the mandatory integration of battery energy storage systems (BESS) as two of its most significant features.

According to UOB Kay Hian Research, LSS6 includes 2.5 GW of solar capacity alongside 1.25 GW of BESS, exceeding previous market expectations. The research house estimates that the programme could generate approximately RM9 billion in jobs and expects solar EPCC players to benefit from sustained order-book replenishment and earnings visibility over the next three to five years.

UOB Kay Hian Research also pointed to more than 6.5 GW of planned solar developments between 2026 and 2029, supporting its “overweight” view of the sector. It estimates total EPCC replenishment opportunities could reach between RM13 billion and RM23 billion over the next four years as Malaysia rolls out LSS6 alongside the Corporate Renewable Energy Supply Scheme (CRESS).

Among its preferred sector picks, UOB Kay Hian Research named Solarvest Holdings Bhd, Pekat Group Bhd and Northern Solar Holdings Bhd.

RHB Research also maintained an “overweight” stance on the energy sector, identifying Solarvest and Samaiden Group Bhd as likely major beneficiaries due to their strong execution track records across previous LSS programmes. The research house expects Solarvest to capture approximately 20%–30% market share, while Samaiden could secure 10%–15%, supporting further growth in their respective order books.

RHB Research estimates total project capital expenditure associated with LSS6 could reach RM13 billion–RM15 billion. However, declining solar module costs could partially offset the additional project costs associated with BESS integration. At the same time, the research house cautioned that increasingly competitive bidding could place pressure on project returns.

The potential compression of returns remains an important consideration for developers and contractors. RHB Research noted that the final power purchase agreement terms and project internal rates of return remain unclear, while increasingly competitive bidding could push project IRRs toward the mid-single-digit range.

CGS International Research (CGSI) views LSS6 as another major milestone in the implementation of Malaysia’s National Energy Transition Roadmap (NETR). According to CGSI Research, cumulative utility-scale solar quotas announced since the launch of the NETR in mid-2023 have now reached 6.7 GW, including LSS6. This is approximately three times the 2.2 GW awarded across the LSS1–LSS4 programmes between 2016 and 2021, highlighting the significant acceleration in Malaysia’s renewable energy deployment.

CGSI Research maintained its “overweight” rating on the utilities sector, arguing that the NETR has shifted the industry from a traditionally defensive earnings segment toward one offering clearer long-term structural growth.

The research house estimates that LSS6 alone could generate approximately RM13 billion–RM15 billion in EPCC opportunities, benefiting established contractors including Solarvest, Samaiden, Sunview Group Bhd, Cypark Resources Bhd and Pekat.

TA Research similarly expects solar EPCC companies to emerge as some of the biggest beneficiaries of the programme, estimating approximately RM11 billion–RM12 billion in opportunities from solar and BESS installations.

TA Research expects the impact to become increasingly visible once LSS6 EPCC awards begin to be announced, potentially from the third quarter of 2027. In the meantime, ongoing LSS5+ EPCC awards are expected to continue supporting order-book replenishment for industry participants.

Beyond the immediate investment opportunity, LSS6 could also play an important role in strengthening Malaysia’s electricity system. The integration of battery storage is expected to improve grid reliability and support higher renewable energy penetration, allowing the country to accommodate a larger share of variable solar generation over time.

While competitive bidding could constrain margins, the scale of the programme is expected to maintain strong investment interest and provide greater visibility for renewable energy developers and contractors over the coming years.