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Renewable Energy in Malaysia

Fossil fuel generation significantly contributes to global carbon dioxide and other GHG emissions to the atmosphere. By shifting to renewable energy (RE) sources, we can help to reduce heavy dependence on fossil fuel for power generation and greenhouse gas (GHG) emissions.

RE, also referred to as clean energy, is derived from natural resources that are constantly replenished. The current installed capacity for renewable energy in Malaysia is about 23%. Malaysia is already making progress and aims to achieve 40% of RE by 2035. The renewable energy resources currently available in Malaysia are solar, biomass, biogas and hydro.

Solar Energy

Solar Power

Malaysia has a high potential in solar generation due to our abundant sunshine, making solar energy the highest RE source in our country. Solar energy is converted from sunlight to electricity via solar cells installed in the solar panels. Large Scale Solar (LSS) and rooftop solar are the main solar deployment in Malaysia.


Steps to getting Solar PV panels for home usage

  1. Choose from the purchasing modes of either outright purchase or a leasing programme.
  2. Look over the registered solar PV service providers (RPVSP) or investors (RPVI) on SEDA’s website.
  3. Appoint the one that offers a package that suits you best.
  4. Let the service provider or investor apply for NEM on your behalf.
  5. Sign the offered package after the NEM application is approved.
  6. Wait for the service provider or investor to install the solar panel.
  7. TNB will change your existing meter to an NEM meter.



Hydropower is the conversion of kinetic energy of water into electricity. In 2016, hydro power generation contributed 13% of total power generation to our nation. The hydropower stations in Malaysia are classified into large (> 30MW) and small (< 30MW) hydropower. Large hydropower is developed by the incumbent utility company, while small hydropower is operated by any private developer, which will be primarily subsidised through the Malaysian Sustainable Energy Development Authority’s (SEDA) Feed-in Tariff (FIT) system. Small hydropower also refers to run-of-river (RoR) schemes, which depend on the river flow to generate electricity with little or no water storage is required. Small hydropower provides more opportunity to support rural electrification expansion and also contribute to grid energy and capacity support. RoR is applicable for many potential sites in West Malaysia, especially rivers with high water flow in Perak, Pahang, Terengganu and Negeri Sembilan.



Biomass energy is developed from organic materials including resources from palm oil waste, rice husks, coconut waste, sugar cane waste, municipal waste and forestry waste. With the direct combustion power generation method, the steam generated is used to turn a turbine, then drive the generator that produces electricity. 

Biogas is a gaseous compound produced from anaerobic digestion, where the organic material from waste is converted to biogas that can be used to generate electricity. Biogas is harvested through landfill gas and anaerobic digestion, then is burnt in a boiler whereby the heat can be used for steam production.



There are three main initiatives to promote RE in Malaysia, including the Net Energy Metering (NEM) scheme, the large-scale solar (LSS) project scheme and self-consumption. 

NEM is a solar photovoltaic (PV) program that is being introduced to replace the FIT scheme under the 2018 budget. NEM applies to all the customers of TNB and SESB, including domestic, industrial and commercial sectors. The electricity generated from solar PV systems is consumed initially, and any excess will be exported to the grid. After, they sell to the Distribution Licensee (TNB/SESB) at a premium rate, predetermined by the Energy Commission. 

LSS refers to the generation of electricity by a photovoltaic power station that is classified as utility-scale or large-scale. The companies that are interested in establishing a large-scale solar plant must go through a bidding process announced by the Energy Commission. The licence will be granted to shortlisted companies only. 

Self-consumption (SELCO) allows the consumer to generate electricity from their own solar PV panel. This program is for individual usage only and any excess production is not allowed to flow into the grid. The program helps to reduce electricity bills due to the increasing cost of electricity.

RE sources are a good alternative to conventional power generation, as they help in lowering the GHG emissions and the accompanying global warming effects. Malaysia has aggressive targets to reduce carbon footprint in improving the nation’s power generation to transition to RE. Installing solar panels would be one of the most effective ways for us to cut down on our carbon footprint and electricity bills in the long term. Eventually, by having clean, affordable and renewable energy, we can transition to more sustainable living.


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