How mandatory storage could shape Malaysia’s utility-scale solar market
Solar power now makes up 92% of Malaysia’s renewable energy capacity, placing storage at the center of the country’s energy transition agenda. (Photo: Solarvest)
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Solar power has changed the rhythm of the grid. There is too much electricity during the day and not enough once the sun goes down. This mismatch, illustrated by the “duck curve,” has become a challenge faced by every market with growing renewable energy. Battery Energy Storage Systems (BESS) is increasingly seen as the tool that can fill this gap and keep the grid steady.
Solar power now accounts for 92% of Malaysia’s total renewable energy installed capacity, according to government figures. This reliance on solar generation is shaping Malaysia’s next policy moves, pushing storage to the center of its energy transition agenda.
Malaysia’s battery energy storage market is projected to grow from USD 3.1 billion in 2025 to USD 9.8 billion by 2031.
Malaysia moves toward mandatory storage for large-scale solar
The Malaysian government plans to require the next round of bidding for large-scale solar (LSS) projects to include battery energy storage systems. The LSS program, which has progressed through phases from LSS1 to LSS5, is a government-led competitive bidding scheme designed to develop utility-scale solar farms that feed power into the national grid.
“It is the government’s intention that when we implement the next LSS, we expect these projects to come with, or be required to install, BESS as part of their system,” Deputy Minister of Energy Transition and Water Transformation Akmal Nasrullah Mohd Nasir said on Dec. 3. If implemented, this would be the first time that BESS becomes a mandatory component of large-scale solar projects in Malaysia.
BESS are large rechargeable battery systems that store electricity, often from renewables such as solar or wind, for use when it is needed. Equipped with control software, these systems charge when supply is abundant, discharge when demand rises, and continuously monitor system performance to support grid stability.
The new BESS mandate is part of Malaysia’s broader effort to strengthen its solar strategy as it works toward a target of 70% renewable energy in the national power mix by 2050. Over the past year, the government has introduced several initiatives to accelerate solar deployment across different market segments. In September 2024, the Corporate Renewable Energy Supply Scheme (CRESS) opened the door for businesses to purchase green electricity directly from renewable energy developers through third-party grid access.
In January 2025, Malaysia removed the 85% demand capacity cap for self-consumption projects and allowed solar installations not only on rooftops but also on the ground and over bodies of water. Beginning January 2026, the Solar Accelerated Transition Action Programme (Solar ATAP) will replace the previous Net Energy Metering (NEM) scheme, offering lifetime contracts, no capacity quotas, and bill offsets based on the system marginal price to improve export returns for residential, commercial, and industrial users.
Together, these measures have created a clearer pathway for both rooftop and utility-scale solar growth. And with LSS bidding set to enter its sixth round, the sector is preparing for the next phase: pairing solar with storage.
“We prepared early, and we are ready,” said Jack Tan, Group Vice President of Malaysian solar company Solarvest.
Tendering storage while raising the regulatory bar
The Malaysian government is advancing energy storage through two parallel pathways: competitive bidding and regulatory requirements. In 2024, it launched the Malaysia Battery Energy Storage Technology (MyBEST) tender, offering 400MW and 1,600MWh of utility-scale BESS capacity. Akmal has confirmed that evaluations are complete and that results will be announced soon, with winning projects expected to come online by 2027.
More than 20 companies submitted over 30 proposals for MyBEST, including Solarvest, Tenaga Nasional Berhad (TNB), and storage firm BM Greentech, among others.
Alongside procurement efforts, the government is tightening environmental safeguards for battery deployment. EPC providers must detail dismantling, decommissioning, disposal and recycling procedures in accordance with local laws, including the Environmental Quality Act and the Solid Waste and Public Cleansing Management Act 2007. Projects are also required to implement an environmental management plan and ensure mandatory recycling of battery components to prevent the worsening of battery waste issues.
According to Tan, additional regulatory thresholds are likely to follow, especially for technology standards. Developers bidding for MyBEST are already required to work with Tier 1 battery and inverter manufacturers to ensure system quality and grid compatibility. Malaysia’s grid, supported by a centralised monitoring system and high infrastructure standards, is one of the most stable in Southeast Asia, he said.
Issues such as voltage fluctuations or system disruptions seen in Vietnam or the Philippines when large renewable projects were connected to the grid have not occurred in Malaysia. Tan believes the country is unlikely to face similar challenges because of its stringent requirements and consistently high grid standards.
Preparing for a storage-driven solar market
Solarvest has been active in solar-plus-storage even before the recent policy shift. The company held roughly 40% of the EPCC market share in LSS5 and LSS5+, and with a new round of LSS on the horizon, it aims to position itself as a major player once again. Solarvest began developing an AI-driven energy management system for storage two to three years ago, designed for use not only in utility-scale projects but also in residential and industrial settings.
In September, the company deepened its expansion ambitions by signing a joint investment framework agreement with global alternative asset manager Brookfield. The partnership targets at least 1.5 GW of utility-scale solar and storage development over the next three to five years. Tan said the collaboration strengthens Solarvest’s capabilities in technology, talent, and project pipelines, enabling the company to maintain a competitive edge in the evolving market. Solarvest has also invested in several battery projects in China to learn from the country’s experience in scaling production and reducing costs.
The Solarvest–Brookfield partnership aims to deploy at least 1.5 GW of utility-scale solar and storage within the next three to five years. (Photo: Solarvest)
Looking ahead, Tan expects continued, and possibly accelerating, growth in Malaysia’s BESS market. He pointed to the rapid rise of data centers and the significant electricity demand they bring, which will further drive storage deployment. He also anticipates wider adoption of AI-driven EMS solutions and a growing market for the operation and maintenance of both solar and BESS systems.
