Malaysia’s Solar Capacity Surpasses 5.7 GW

Why It Matters

The rapid scale‑up positions Malaysia as a Southeast Asian solar leader and provides a low‑carbon power source for a booming data‑centre industry, accelerating the region’s energy transition.

Key Takeaways

• Solar capacity reached 5.78 GW by 2025 end
• 2025 added ~1.45 GW across all schemes
• LSS approved 6.0 GW for 117 developers
• ATAP replaces net‑metering, removing rooftop quotas
• 1.5 GW solar‑storage project serves AI data centres

Pulse Analysis

Malaysia’s solar boom reflects a coordinated policy push that blends competitive auctions, fixed‑tariff incentives and a new focus on self‑consumption. The International Energy Agency’s PV Power Systems Programme recorded a jump from 4.33 GW in 2024 to 5.78 GW by year‑end 2025, a growth rate that outpaces most ASEAN peers. The LSS auction mechanism, now targeting an additional 2 GW, has already secured approvals for over 6 GW, signaling strong developer confidence and a clear pathway for utility‑scale projects.

The transition from the legacy net‑metering framework to the Solar Accelerated Transition Action Program (ATAP) marks a strategic shift toward unrestricted rooftop adoption. By eliminating quota caps and simplifying approval processes, ATAP encourages residential and commercial owners to install PV systems for self‑consumption, even though export revenues are limited. Analysts note that allowing monetisation of excess generation could further boost uptake, while faster grid‑connection timelines and transparent hosting‑capacity maps would address lingering bottlenecks.

Corporate demand, especially from the data‑centre sector, is emerging as a catalyst for the next wave of installations. A flagship 1.5 GW solar project paired with battery storage is being developed to power AI‑focused data centres under Malaysia’s Corporate Renewable Energy Supply Scheme, enabling firms to purchase green electricity directly from generators. Coupled with recent restrictions on non‑AI data‑centre expansion, this underscores a policy environment that aligns renewable growth with high‑value, energy‑intensive industries, setting the stage for sustained solar deployment in 2026 and beyond.