Solar Panel Market in Malaysia

Solar Panel in Malaysia Trends and Forecast

The future of the solar panel market in Malaysia looks promising, with opportunities in the commercial, residential, and industrial applications. The global solar panel market is expected to reach an estimated $248.1 billion by 2031, with a CAGR of 7.6% from 2025 to 2031. The solar panel market in Malaysia is also forecasted to witness strong growth over the forecast period. The major drivers for this market are growing awareness of the benefits of solar energy, increasing demand for renewable energy, and the need to reduce carbon emissions.

• Lucintel forecasts that, within the application category, photovoltaic is expected to witness higher growth over the forecast period due to its affordability, easy installation, and efficiency at converting sunlight into electricity.
• Within the end use category, the commercial sector is expected to witness the highest growth over the forecast period due to growing preference for solar energy in this sector to reduce electricity expenses.

Emerging Trends in the Solar Panel Market in Malaysia

The Malaysian solar panel market is undergoing revolutionary growth, spurred by local government efforts and international market trends. With a firm focus on developing renewable energy capacity, the Malaysian government has put in place policies such as the Net Energy Metering (NEM) program, along with new incentives and lower solar panel prices. This increased demand for clean energy solutions is also driven by technological advancements and the rising adoption of solar energy by households and businesses. Here are five key emerging trends that are defining the future of Malaysian solar energy market.

• Expansion of the Net Energy Metering (NEM) Program: The Malaysian government has significantly increased quotas for the Net Energy Metering (NEM) program. This allows residential and business consumers to balance their power bills by feeding excess solar electricity back into the grid. With greater participation, the scheme should encourage more customers to switch to solar power and help Malaysian renewable energy agenda. By allowing users to lower energy bills and earn money, NEM makes solar power economically viable.
• Solar for Rakyat Incentive Scheme (SolaRIS): The SolaRIS scheme, offering rebates of up to RM4,000, aims to make solar energy more accessible to Malaysian homes. With broader coverage, more Malaysians are now eligible for financial assistance to lower installation costs. This scheme promotes the wider use of solar technology, especially among residential consumers, and supports the nation’s initiatives to achieve its renewable energy goals. As a result, SolaRIS significantly reduces the cost of solar adoption for consumers, driving a mass shift toward clean energy.
• Falling Prices of Solar Panels: The price of solar panels has dropped significantly due to improvements in manufacturing technology and economies of scale. As a result, solar energy systems are becoming more affordable for residential and commercial consumers. Lower costs not only make solar panels affordable to a broader segment of the population but also motivate companies to integrate solar energy into their operations. This cost reduction increases market competitiveness and accelerates the adoption of solar technology in Malaysia.
• Smart Grid Technologies Integration: Malaysia is investing in smart grid technology to improve the efficiency of its energy infrastructure. These smart grids enable better management of solar energy production and usage by integrating clean sources like solar into the national grid more smoothly. By enhancing the transmission and distribution of energy and minimizing power wastage, smart grids make Malaysian electricity system more efficient and reliable. This technology supports large-scale renewable energy integration and helps achieve the countries long-term energy sustainability goals.
• Expansion of Corporate Power Purchase Agreements (PPAs): Corporate Power Purchase Agreements (PPAs) are growing as companies increasingly enter into long-term agreements with solar suppliers to ensure a stable renewable energy source. Large corporations are seeking to meet their sustainability goals and lock in energy prices by investing in solar power. These deals, such as the one between STMicroelectronics and BKH Solar, show how private sector investment is driving solar power adoption in Malaysia. The growing interest in PPAs also supports demand for utility-scale solar projects, leading to a more diverse and resilient solar market.

These emerging trends—NEM program growth, SolaRIS incentives, falling solar panel prices, smart grid integration, and corporate PPAs—are transforming Malaysian solar panel industry. Together, they are making solar power more affordable, accessible, and efficient, stimulating greater adoption across residential, commercial, and industrial sectors. With strong government support and an accelerating technological environment, Malaysia is positioned to achieve its renewable energy objectives, paving the way for a greener, more sustainable future.

Recent Developments in the Solar Panel Market in Malaysia

Over the past few months, Malaysian solar panel market has experienced dynamic growth, fueled by government initiatives and international market forces. Key developments, such as the extension of solar incentives, new solar tenders, and ongoing foreign investment, are paving the way for faster solar adoption. The governments renewed focus on renewable energy, through initiatives like the Solar for Rakyat Incentive Scheme (SolaRIS), is furthering the nation’s green energy drive. These advances are reinforcing Malaysian steady march toward becoming a regional solar energy leader.

• Renewal of Solar for Rakyat Incentive Scheme (SolaRIS): The government of Malaysia has renewed the SolaRIS rebate until 2025, providing families with up to RM4,000 in funding for solar panel installations. This program aims to make solar power more affordable and accessible to ordinary Malaysians by reducing the initial cost barrier. By encouraging residential adoption, SolaRIS speeds up the transition to solar power, helping the nation meet its goal of 31% renewable capacity by 2025. This extension allows more homes to join the solar revolution.
• Tender for 2 GW LSS5 Solar: In April 2024, the Ministry of Energy and Natural Resources released the 2 GW Large Scale Solar (LSS5) tender with four packages for solar projects, ranging from rooftop to floating solar systems. This is a key milestone in Malaysian push to increase its renewable energy capacity and reduce reliance on a single source of energy. By attracting both domestic and foreign developers, the LSS5 tender will boost Malaysian solar capacity, bringing the country closer to its renewable energy goals.
• Investment of Chinese Inverter Maker in Malaysia: Ningbo Deye Technology Co., a leading Chinese inverter maker, has announced a US$150 million investment to establish a solar equipment manufacturing base in Malaysia. This investment highlights Malaysian appeal as a strategic hub for solar component manufacturing. With the increasing demand for solar solutions in Southeast Asia, this development solidifies Malaysian position as a key player in the global solar supply chain. This move also strengthens the domestic solar manufacturing industry, fostering greater innovation.
• U.S. Impact: The U.S. has imposed tariffs on solar panels imported from Southeast Asia, including Malaysia, creating challenges for local manufacturers, particularly those relying on Chinese-sourced components. As a result, many solar companies in Malaysia are adjusting their production plans, which may hinder the expansion of local solar capacity. Despite these challenges, Malaysian solar sector remains strong, with numerous companies exploring new markets and supply chains to mitigate the impact of these tariffs.
• Solar Panel Oversupply and Market Rebalancing: An oversupply of solar panels in the global market has led to significant price drops and overstocking. This excess supply, however, is expected to lead to market rebalancing in 2025 as companies scale back production to meet actual demand. In Malaysia, this adjustment could stabilize panel prices and promote more sustainable growth in the solar industry. As the market rebalances, companies are prioritizing efficiency gains and long-term sustainability, ensuring solar energy remains an affordable and reliable choice for consumers.

The latest developments in Malaysian solar panel industry, including extended incentives, new tenders, foreign investments, and the effects of global trade policies, are redefining the sector. These changes enhance Malaysian renewable energy drive while addressing both local and global challenges. With government support and increased private sector participation, Malaysia’s solar energy industry is positioned to continue growing, supporting the country’s environmental and energy security objectives.

Strategic Growth Opportunities for Solar Panel Market in Malaysia

The Malaysian solar panel market is growing rapidly, driven by technological innovations and strong government interest in sustainability. As demand for renewable energy increases, significant growth opportunities arise across various applications. These include residential, commercial, industrial, and utility-scale sectors, each offering unique advantages for market expansion. This creates a diverse field of investment and innovation potential. Below are five key growth opportunities across different solar panel applications that are shaping Malaysian solar energy industry.

• Solar Systems for Residential Use: Residential solar systems offer significant growth opportunities in Malaysia due to increased consumer awareness of environmental sustainability and the potential for savings on electricity costs. Government initiatives, such as the SolaRIS rebate program, have also made solar panel installation more affordable for households. As more homes transition to solar power, demand for residential solar systems is expected to continue growing rapidly. This transition not only furthers the nations renewable energy goals but also empowers Malaysian citizens with greater energy independence, making the residential sector a leading force in the solar panel industry.
• Commercial Renewable Applications: The commercial use of solar systems is gaining momentum as businesses seek to reduce energy bills and improve sustainability. Malaysian expanding business sector, especially in industries such as manufacturing and retail, is turning to solar power to manage energy costs and minimize reliance on the national grid. The availability of government incentives and supportive policies is further encouraging companies to invest in solar technology. This sector offers high returns on investment for businesses and is a key growth area for solar panels, particularly as corporate social responsibility (CSR) and environmental, social, and governance (ESG) concerns gain prominence.
• Utility-Scale Solar Projects: Utility-scale solar projects present some of the most significant opportunities for solar panel deployment in Malaysia. Large solar farms have the potential to generate substantial amounts of clean energy, supporting the countries ambitious renewable energy goals. The governments Large-Scale Solar (LSS) initiatives have already led to the development of large solar power plants, attracting both domestic and international investors. These projects provide high returns, help stabilize the grid, and reduce dependence on fossil fuels, making them a vital component of Malaysian long-term renewable energy strategy.
• Floating Solar Projects: Floating solar panels offer an innovative solution to land use limitations in Malaysia. With numerous lakes and reservoirs across the country, floating solar projects can generate renewable energy without using valuable land. These systems are particularly suitable for large-scale projects in areas where land is scarce or costly. As floating solar technology is being developed globally, Malaysia is well-positioned to adopt this solution as part of its strategy to diversify its renewable energy resources, offering both environmental and economic benefits.
• Solar-Powered EV Charging Stations: The growth of electric vehicles (EVs) in Malaysia presents a unique opportunity to integrate solar power with EV charging stations. Solar-powered charging stations offer a sustainable alternative to meet the rising number of EVs on the road. With the government’s push to increase EV adoption, coupled with the declining cost of solar technology, this presents an exciting growth opportunity. By combining solar panels with EV charging infrastructure, Malaysia can reduce the environmental impact of transportation while supporting the development of green mobility solutions.

The strategic growth opportunities in Malaysian solar panel industry—ranging from residential, commercial, and utility-scale applications to floating solar and EV charging infrastructure—are transforming the energy sector. Each application offers distinct benefits and aligns with the countries sustainability goals. As these opportunities come to fruition, Malaysia will be able to increase its solar power capacity, accelerating the transition to a cleaner, more energy-independent future.

Solar Panel Market in Malaysia Driver and Challenges

The Malaysian solar panel market is influenced by a range of technological, economic, and regulatory factors. Key drivers include government subsidies, declining solar panel prices, growing environmental awareness, and advances in technology. At the same time, challenges such as high upfront costs, regulatory barriers, and market competition hinder faster market growth. Understanding these drivers and challenges is crucial to navigating the evolving solar landscape. Below are five key drivers and three major challenges impacting Malaysian solar panel market.

The factors responsible for driving the solar panel market in Malaysia include:
• Government Policies and Incentives: The government of Malaysia has implemented several policies and incentives to promote renewable energy adoption, specifically solar energy. The Net Energy Metering (NEM) scheme, which allows consumers to sell surplus energy back to the grid, is a key initiative supporting solar adoption among residential and commercial consumers. Additionally, the SolaRIS rebate program helps cover installation costs for residential consumers, making solar energy more affordable. These policies create a favorable investment climate, stimulating growth in the solar panel market.
• Falling Costs of Solar Panels: The price of solar panels has decreased significantly in recent years due to advancements in manufacturing technologies and economies of scale. As the cost of solar energy systems continues to fall, adoption is rising, particularly in residential and commercial markets. Lower panel prices also reduce the total cost of solar system installations, making solar power a more viable option for Malaysian businesses and households.
• Technological Advances in Solar Energy: Ongoing advancements in solar panel technology, including improved efficiency and longer lifespans, are driving market growth. Higher efficiency means consumers can generate more electricity from the same amount of sunlight, making solar installations more cost-effective. Additionally, developments in energy storage technologies allow solar energy to be used more efficiently even when the sun is not shining. These innovations enhance the reliability and appeal of solar energy systems in Malaysia.
• Environmental Awareness and Sustainability Goals: Increasing environmental awareness is prompting consumers and businesses to seek cleaner energy sources. The growing emphasis on sustainability and carbon emissions reduction is encouraging industries to adopt renewable energy, such as solar power. Malaysia’s goal to achieve 31% renewable energy capacity by 2025 aligns with the country’s global sustainability objectives and drives the growth of the solar panel market. Public education on the environmental benefits of solar power is also promoting wider consumer acceptance.
• Corporate Social Responsibility (CSR) and ESG Investments: Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) initiatives are gaining importance for Malaysian companies. Firms are seeking to reduce their carbon footprints and incorporate renewable energy into their operations to meet sustainability goals. The increasing adoption of solar panels by large businesses, especially through Power Purchase Agreements (PPAs), is a significant driver of market growth. As companies focus more on their environmental impact, the demand for solar energy solutions is expected to rise.

Challenges in the solar panel market in Malaysia are:
• High Initial Investment Costs: Despite the declining cost of solar panels, the initial cost of installing a solar energy system remains a significant barrier for many consumers, particularly in residential and small commercial sectors. Although government incentives help offset these costs, the initial investment can still be prohibitive for low-income households and small businesses. This financial barrier limits the widespread adoption of solar energy, especially in economically disadvantaged areas.
• Permitting and Regulatory Barriers: Although Malaysia’s government has introduced policies to promote solar energy, the regulatory environment remains complex and can sometimes hinder the rapid deployment of solar projects. Delays in permitting processes, unclear regulations, and a lack of standardization can slow down approvals for solar projects, particularly large-scale utility projects. Streamlining these processes is essential to accelerating the adoption of solar energy and attracting more investment in the sector.
• Market Competition and Fragmentation: The Malaysian solar panel market is highly competitive, with numerous local and international players vying for market share. This intense competition can lead to price wars and reduced profit margins for companies, especially in the residential sector. Market fragmentation can also make it difficult for consumers to navigate the range of solar solutions available. Consolidation in the industry or clearer standards could help reduce market fragmentation and create a more customer-friendly environment.

Government incentives, falling solar panel prices, technological advancements, growing environmental concerns, and CSR investments are driving the growth of Malaysian solar panel market. However, challenges such as high initial investment costs, regulatory hurdles, and market competition must be addressed to sustain growth. Overcoming these challenges will enable Malaysia to continue emerging as a leader in renewable energy, ensuring long-term sustainability in its solar energy sector.

List of Solar Panel Market in Malaysia Companies

Companies in the market compete based on the product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leveraging integration opportunities across the value chain. Through these strategies, solar panel companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the solar panel companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10

Solar Panel Market in Malaysia by Segment

The study includes a forecast for the solar panel market in Malaysia by type, application, and end use.

Solar Panel Market in Malaysia by Type [Analysis by Value from 2019 to 2031]:

• Crystal Silicon
• Monocrystalline Silicon
• Polycrystalline Silicon
• Others

Solar Panel Market in Malaysia by Application [Analysis by Value from 2019 to 2031]:

• Photovoltaic
• Concentrated Solar Power

Solar Panel Market in Malaysia by End Use [Analysis by Value from 2019 to 2031]:

• Commercial
• Residential
• Industrial

Features of the Solar Panel Market in Malaysia

Market Size Estimates: Solar panel in Malaysia market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Solar panel in Malaysia market size by type, application, and end use in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different types, applications, and end uses for the solar panel in Malaysia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the solar panel in Malaysia.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.

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FAQ

Q.1 What are the major drivers influencing the growth of the solar panel market in Malaysia?
Answer: The major drivers for this market are rising concern towards environmental pollution, significant demand for renewable energy, and escalating demand for solar panels from residential and commercial projects.
Q2. What are the major segments for solar panel market in Malaysia?
Answer: The future of the solar panel market in Malaysia looks promising with opportunities in the commercial, residential, and industrial applications.
Q3. Which solar panel market segment in Malaysia will be the largest in future?
Answer: Lucintel forecasts that photovoltaic is expected to witness higher growth over the forecast period due to its affordability, easy installation, and efficient at converting sunlight into electricity.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.

This report answers following 10 key questions:

Q.1. What are some of the most promising, high-growth opportunities for the solar panel market in Malaysia by type (crystal silicon, monocrystalline silicon, polycrystalline silicon, and others), application (photovoltaic and concentrated solar power), and end use (commercial, residential, and industrial)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Solar Panel Market in Malaysia, Solar Panel Market in Malaysia Size, Solar Panel Market in Malaysia Growth, Solar Panel Market in Malaysia Analysis, Solar Panel Market in Malaysia Report, Solar Panel Market in Malaysia Share, Solar Panel Market in Malaysia Trends, Solar Panel Market in Malaysia Forecast, Solar Panel Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.