Malaysia Renewable Energy - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

Malaysia renewable energy market size in 2026 is estimated at 13.68 gigawatt, growing from 2025 value of 11.09 gigawatt with 2031 projections showing 39.03 gigawatt, growing at 23.33% CAGR over 2026-2031. This report is Segmented by Technology (Solar Energy, Wind Energy, Hydropower, Bioenergy, Geothermal, and Ocean Energy) and End-User (Utilities, Commercial and Industrial, and Residential). The Market Sizes and Forecasts are Provided in Terms of Installed Capacity (GW).

Malaysia Renewable Energy Market Trends and Insights

National Energy Transition Roadmap Implementation Accelerates Grid Modernization

NETR sets binding targets of 31% renewable energy by 2025 and 40% by 2035, unlocking clearer revenue visibility for developers. TNB's capital expenditure (capex) commitment of MYR 42.9 billion (USD 10.2 billion) earmarks 64% for grid reinforcement, including new inter-regional circuits and advanced system operator tools. The roadmap mandates 2.5 GW of floating-solar deployments atop hydro dams and five centralized 150 MWp solar parks, directly addressing land scarcity constraints. By integrating Enegem into policy design, NETR also enables exporters to tap the ASEAN Power Grid, elevating Malaysia's renewable energy market competitiveness. Collectively, these measures ease the 24% solar-penetration cap on peak demand, ensuring additional headroom for variable generation.

Corporate PPAs Drive Demand from Data-Center Expansion

Data-center investments of MYR 162 billion (USD 729 billion) booked from 2021 to H1 2024 underpin long-term offtake commitments under the Corporate Renewable Energy Supply Scheme (CRESS).Early signatories, such as AirTrunk and GDS, locked in 29.9 MW and 22.5 MW of virtual PPAs, respectively, with tenor profiles of up to 25 years. TNB itself secured 150 MWp in green electricity supply to Bridge Data Centres under the same framework, adding annuity-style income streams. Corporate buyers prioritize delivery certainty and traceable renewable certificates, driving developers to bundle battery-storage options. The momentum suggests that corporate PPAs could represent 15-20% of Malaysia's annual renewable energy market additions this decade.

Grid Congestion Creates Renewable Energy Curtailment Risks

Solar output already surpasses the 24% peak-demand threshold, leading to periodic curtailment in southern Peninsular Malaysia, where irradiation levels are highest. TNB has allocated 64% of its MYR 16.3 billion (USD 73.4 billion) contingent capex to alleviate bottlenecks, including a 400 MWh BESS in Sabah. Curtailment exposure erodes project returns, prompting regulators at SEDA Malaysia and the Energy Commission to expedite grid code revisions for improved renewable dispatch priority. Smart-grid pilots employing demand response now accompany every new LSS tender to mitigate intermittence.

Other drivers and restraints analyzed in the detailed report include:

• Green Hydrogen Projects Transform Sarawak into Regional Export Hub
• Floating Solar Maximizes Land-Constrained Renewable Deployment
• Land-Use Conflicts Constrain Large-Scale Project Development

Segment Analysis

Hydropower retained a 65.12% share of the Malaysian renewable energy market in 2025, anchored by legacy assets such as Bakun and Murum. Yet geothermal, starting from a low base, is forecast to post a 112.76% CAGR, spearheaded by the Tawau project and expanded heat-flow mapping in East Malaysia. Solar PV follows as the volume workhorse amid falling LCOE and corporate offtake appetite. In contrast, onshore wind remains a niche option due to suboptimal wind speeds, while palm biomass offers a technical potential of 2.3 GW under the Biomass Action Plan. Small hydro and nascent ocean-energy pilots round out the mix.

The evolving stack supports grid stability: floating-solar hybrids capitalize on hydro reservoirs, geothermal furnishes baseload, and BESS smooths solar output. Malaysia's renewable energy market size for geothermal is projected to increase rapidly once field development funding is secured, while solar's growth relies on a consistent auction cadence and rooftop adoption. Hydropower's large-dam development is tapering, shifting focus to run-of-river and micro-hydro schemes that minimize ecological impact.

Complete Report Scope:

• By Technology
  • Solar Energy (PV and CSP)
  • Wind Energy (Onshore and Offshore)
  • Hydropower (Small, Large, PSH)
  • Bioenergy
  • Geothermal
  • Ocean Energy (Tidal and Wave)
• By End-User
  • Utilities
  • Commercial and Industrial
  • Residential

List of Companies Covered in this Report:

• Tenaga Nasional Berhad (TNB)
• Sarawak Energy Berhad
• Solarvest Holdings Berhad
• Plus Xnergy Holding Sdn Bhd
• Cypark Resources Berhad
• TNB Engineering Corporation Sdn Bhd
• JinkoSolar Malaysia Sdn Bhd
• First Solar Malaysia Sdn Bhd
• Canadian Solar Inc.
• JA Solar Technology Co. Ltd
• Trina Solar Co. Ltd
• SunPower Corporation
• TS Solartech Sdn Bhd
• CS Wind Malaysia Sdn Bhd
• Ditrolic Solar Sdn Bhd
• Gentari Sdn Bhd (PETRONAS)
• ERS Energy Sdn Bhd
• Samaiden Group Berhad
• SEDA Malaysia
• Engie Services Malaysia
• Total Energies Renewables Malaysia

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support