Malaysia’s Renewable Energy Outlook Strengthens As Solar And BESS Gain Momentum

Malaysia’s renewable energy sector is entering a period of steady growth, supported by new solar projects and the rising importance of battery energy storage systems. Maybank Investment Bank Group has shared a positive outlook for the sector, saying that the continued development of large-scale solar programmes will remain a strong driver for the market. At the same time, the bank expects battery energy storage to become a major theme starting in 2026 as the country prepares for higher levels of solar power on the grid.

The bank explained that government-backed initiatives such as LSS6, CRESS, and MyBeST will continue to shape the market. It also said that companies with strong technical skills and proven experience in building and integrating battery storage systems will stand out in the coming years. According to the bank, demand for BESS will grow as solar power plays a bigger role in Malaysia’s electricity supply, helping to manage fluctuations from solar generation and improve grid stability.

Maybank IBG projects strong earnings growth for renewable companies over the next two years. It estimates a 34.5% increase in core net profit for 2025 and expects an additional 24.2% growth in 2026. This confidence is mainly driven by ongoing engineering, procurement, construction, and commissioning activities for ongoing solar projects, including LSS5, LSS5+, MyBeST, and CRESS. The bank also expects Solar ATAP, a new policy aimed at boosting the adoption of rooftop solar systems, to bring new momentum to the residential segment.

The bank noted that sector valuations remain reasonable. The renewable energy sector is trading at around 22 times estimated 2026 earnings, which is near the five-year average. Some smaller players, however, are valued below their usual levels, which the bank says may present opportunities for selective investors. These companies could benefit as the market expands and as upgrades to the national grid encourage broader use of battery storage solutions.

Solar power is expected to supply 14% of Malaysia’s electricity by 2030 and 25% by 2035. With this rising share, the need for energy storage systems will increase to smooth out the intermittent nature of solar output. Companies such as Solarvest, Pekat, BM Greentech, Samaiden, and Northern Solar are among those building experience in BESS integration. Maybank IBG continues to name Solarvest as its top pick in the sector due to its strong market share in utility-scale solar and its potential to win new BESS contracts. The bank also started coverage on Pekat with a buy rating and maintained a positive view on BM Greentech, expecting both companies to benefit from growing demand in solar and grid-related developments.