Analysts stay upbeat on Malaysia's renewable energy outlook
Maybank Investment Bank said in its recent report that it retains a positive view on the country's renewable energy sector, underpinned by strong Corporate Green Power Programme (CGPP) execution, stabilising trend on solar panel prices, and upcoming catalysts from large-scale solar 5+ programme (LSS5+) and LSS6 rollouts.
Looking ahead, it noted that orderbook visibility in the sector has improved. This will be driven by solar project commissioning, stable engineering, procurement, construction, and commissioning (EPCC) margins and initial progress on battery energy storage system (BESS) investment.
The report also noted that the government is progressing toward LSS5+ and LSS6 rollouts, with requests for proposals (RFPs) expected to be released in the second half.
Meanwhile, LSS6 is anticipated to open up two gigawatts (GW) of new solar capacity and may incorporate BESS elements as part of grid firming requirements.
"CGPP and LSS5 remain critical growth engines, with most awarded projects targeting to complete by FY2026-FY2027," said the research house.
Maybank also highlighted that solar panel prices have remained stable at multi-year lows, with the latest quotes below US$0.10 per watt.
This is supportive of the project's internal rate of return and is expected to sustain through the second half due to global oversupply, despite higher demand from Southeast Asia, it added.
Meanwhile, Kenanga Research highlighted in its recent report that the EPCC contract value for the sector has now surged to 17.4 billion ringgit (US$4.1 billion).
While LSS5+ is entering the award phase, the research house noted that Corporate Renewable Energy Supply Scheme (CRESS) is also back in play as the recent tariff hike hits data centres, triggering a surprise jump in EPCC job flow.
Hong Leong Investment Bank Research also anticipates an extended growth phase in EPCC orderbooks due to the coming solar EPCC award cycle driven by LSS5, LSS5+ and LSS6.
"Domestic orientation reduces the risk of negative earnings revision due to uncertain external developments," the research house said in its recent report.
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