Malaysia Targets 6.5 GW Solar Expansion With Floating Solar Driving Renewable Energy Growth

Malaysia’s renewable energy sector is preparing for major expansion as the country aims to significantly increase its solar power capacity over the next few years. According to a report by UOB Kay Hian, Malaysia’s solar photovoltaic capacity is expected to cross 6.5 GW between 2026 and 2029. The growth is mainly supported by the government’s upcoming Large Scale Solar 6 (LSS6) tenders and the Corporate Renewable Energy Supply Scheme, which are expected to create large opportunities for engineering, procurement, construction, and commissioning companies.

Industry estimates suggest that these new solar-related contracts could be valued between MYR 13 billion and MYR 23 billion over the next five years. The expansion is also closely linked to Malaysia’s long-term clean energy target of achieving a 70 percent renewable energy generation mix by 2050. To meet this goal, the country plans to increase its solar power capacity from 5.8 GW in 2025 to nearly 56 GW in the coming decades.

One of the biggest challenges for large-scale solar development in Malaysia is limited land availability. Issues related to land ownership and development restrictions are making it difficult to expand traditional ground-mounted solar farms. As a result, floating solar photovoltaic technology is emerging as an important solution. Malaysia is estimated to have around 16.5 GW of floating solar potential across its water bodies.

The upcoming LSS6 tender, expected to launch by mid-2026 with a planned 2 GW allocation, is likely to include a larger share of floating solar projects along with mandatory Battery Energy Storage Systems. Floating solar plants offer several benefits, including 5 to 15 percent higher energy generation due to better sunlight exposure and the natural cooling effect of water. Combining floating and ground-mounted systems can also improve resilience against floods and support more stable power generation.

Despite these advantages, floating solar systems are more expensive than conventional solar plants. They require specialized non-corrosive materials and advanced inverters designed for water-based operations, making them nearly 30 percent costlier. To support investment in the sector, authorities are offering higher tariffs for floating solar projects. Environmental protection is also receiving attention, with operators conducting regular water quality monitoring to safeguard aquatic ecosystems and ensure sustainable clean energy development.