KUALA LUMPUR: Malaysia's journey towards a greener future through solar energy presents vast potential, but the country has been slow to catch on and lacks direction, industry observers said.
Hence, they said it requires concerted efforts from both the government and industry players to overcome existing challenges and seize opportunities for sustainable growth.
With ambitious targets outlined in the National Energy Transition Roadmap (NETR), the country aims to escalate its solar energy capacity from a measly 4.0 per cent to an impressive 58 per cent by 2050.
This would mean an additional 55GW of solar PV capacity, which translates to around RM200 billion of potential contract opportunities for the solar engineering, procurement, construction and commissioning (EPCC) players.
The contracts in EPCC have spurred a surge of interest among industry players eager to seize their share of the burgeoning market.
Tradeview Capital fund manager Neoh Jia Man said even though Malaysia's solar energy is not as high as some neighbouring countries, more companies are getting interested in it, especially after the Covid-19 pandemic.
This interest is driven by new plans by the government and upcoming projects like Large Scale Solar 5 (LSS5), he added.
Malaysian Institute of Economic Research economist Dr Shankaran Nambiar said not only will harnessing solar energy open up new sources of energy but it will also open up new trading opportunities.
Also, Malaysia wants to reduce its emissions to zero by 2050, so solar energy is becoming more important.
Globally, the solar market is growing fast, rising 64 per cent in 2023 alone, with most of the growth driven by China and the decline in solar panel costs, he said.
"This means Malaysia has a chance to catch up and become a big player in solar energy, making the country cleaner and greener for the future," he told Business Times.
Nambiar said with the emphasis on environmental, social and governance, and the move away from fossil fuels, alternative sources of energy have become more important.
Within Asean, Vietnam, Thailand and Indonesia are taking the lead, he added.
According to another industry expert who prefers to stay anonymous, Malaysia is lagging behind in the solar industry compared to countries like Vietnam and Singapore.
"Malaysia has been slow to catch on and lacks direction. Even though there is a recent push into solar, there's uncertainty about how much progress we will make," the industry expert said.
The expert also points out that the industries rely heavily on government support.
He criticised the government for being slow and not taking proactive steps to encourage industries.
"Government-linked companies (GLCs) like Khazanah Nasional Bhd prefer safe industries instead of investing in new technologies, which could hinder Malaysia's growth in the solar sector," said the anonymous source.
Solarvest aims to become a major RE player in Asean
Against the odds, clean energy expert Solarvest Holdings Bhd remains steadfast in becoming a major renewable energy (RE) solutions player in Asean.
It is planning to enter a new market within the same region for industrial and commercial rooftop solar photovoltaic installation projects, enabling it to strengthen its orderbook.
Upon completion, the project is expected to be the largest of its kind in the new market.
Solarvest's executive director and group chief executive officer Davis Chong Chun Shiong said the company has been receiving positive feedback from its multinational corporation clients that have a presence in multiple countries and have been invited to be their strategic partner in the region.
"In the competitive landscape, there are not many international or regional centric engineering, procurement, construction, and commissioning (EPCC) developers like Solarvest.
"We also observed players from Western and Japan. But I always believed our local value (in the Southeast Asia region) helps us to build the business faster as we have better understanding and the capacity to expand regionally," he told Business Times.
Solarvest is a leading local photovoltaic (PV) system contractor with a 30 per cent local market share and has completed projects under the(LSS), Corporate Green Power Programme (CGPP) and feed-in tariff (FiT) scheme driven by the government, as well as its own rooftop assets.
Within the EPCC segment, the company's unbilled order book currently stands at RM289 million, which will keep it busy for the next two years.
This includes RM75 million from large-scale solar 4 (LSS4) projects, which are nearing completion.
Chong said its primary goal is to capitalise the growing demand for sustainable energy solutions within the region.
As of today, the total megawatt-peak (MWp) for overseas projects secured stands at 23.5 (MWp).
"We are optimistic to materialise our 3.1 GW tender book across Asia Pacific in 2024, contributing to the growth and sustainability of the renewable energy sector," Davis added.
Solarvest is in seven countries including Taiwan, Vietnam, Philippines, Indonesia, Thailand, Singapore and Malaysia.
"Among these countries, we put our priorities in Vietnam, the Philippines and Indonesia," he added.
Chong said in all Solarvest's international expansion, the company would prefer to grow its business with solar energy solutions, regardless if it is utility (large scale) or rooftop.
"We believe rooftop solar has a lower entry barrier and we can leverage on our current data based in Malaysia," he added.
On the local front, there are plenty of opportunities in the pipeline for the company to grow its order book in the coming quarters underpinned by government's strong commitment towards RE via NETR and RE exports and potential awards of CGPP quotas and EPCC contracts.
"With the NETR programme and cross border electricity sales programme upcoming, we are anticipating a new energy market growing to another level, and with the expansion, it is going to be a game changer for the country and the region.
"This will open up opportunities for bigger players like us, we stay away from the smaller EPCC players, capitalising on our strength and market position to capture the regional and cross- border opportunities," said Davis.
Other projects in the pipeline are with the NETR, and Cross Border Electricity Sales (CBS) program with Singapore and other Asean countries.
Solarvest is partnering with Paragon Globe Bhd on a new solar-ready factory and a green industrial township focused on renewable energy.
The project, which involves various components, such as commercial and industrial energy solutions, as well as facilities for end-use energy and electricity vehicle charging is anticipated to generate around 12.5 MWp of renewable energy.
Chong said upon completion, the project is anticipated to yield some 12.5MWp in total renewable energy capacity, making it one of Johor's greenest and most energy efficient industrial townships.
Solarvest's collaboration with Paragon takes a leap forward in realising "Johor Green Deal" goal in accelerating energy transition within the commercial and industrial buildings in the region, he added.
Solarvest started as a one-stop solar photovoltaic system solution provider for residential, commercial, industrial, and utility-scale solar farms.
Today, Solarvest has accumulated a renewable energy portfolio of over 1,000MW (on-going and completed).
The company is currently venturing into other clean energy solutions including, among others, hydrogen, battery storage, data center, energy efficiency, low-carbon mobility, and renewable energy certificates.
In the second quarter of financial year 2024 Solarvest registered a revenue of RM139.9 million, representing a 42.5 per cent YoY growth from the same quarter last year.
The increase in revenue was mainly driven by the higher construction progress of LSS 4 projects.