Technological advancements
Recent years have seen significant progress in solar energy technology. Photovoltaic (PV) cells, the core component of solar panels, have become much more efficient, thanks to new materials like perovskite, which absorbs sunlight more effectively.
Innovations like bifacial panels, which capture sunlight on both sides, and solar tracking systems, which adjust to follow the sun’s movement, further enhance energy capture and efficiency.
In Malaysia, the efficiency of commercial solar panels has risen from 15% to over 20% in the last decade, with experimental technologies showing potential to exceed 40%. This means solar panels are becoming more powerful and affordable, making solar energy accessible to more people.
Cost reductions
The cost of solar energy has plummeted, making it one of the most affordable energy sources. According to the International Renewable Energy Agency (Irena), the cost of solar PV electricity has fallen by 82% over the past decade.
In Malaysia, the government’s commitment to renewable energy has driven down costs through incentives and support for solar projects. This reduction is driven by economies of scale, technological improvements, and competitive market dynamics.
As a result, more homeowners, businesses and utilities are investing in solar installations, further driving down costs through increased demand and production efficiencies.
Energy storage solutions
One of the critical challenges for solar energy has been its intermittency — the sun doesn’t shine all the time. However, advancements in battery storage technology are addressing this issue.
Lithium-ion batteries, solid-state batteries, and other storage innovations are enabling the storage of solar energy for use during cloudy days and at night, enhancing the reliability and appeal of solar power.
In Malaysia, the Energy Commission has been promoting energy storage solutions to complement solar power, which is expected to see significant growth in the coming years.
Integration with smart grids
The integration of solar energy with smart grids is revolutionising energy management. Smart grids use digital technology to monitor and manage the flow of electricity, ensuring efficient distribution and reducing wastage.
By integrating solar energy, these grids can balance supply and demand more effectively, leading to a more resilient and sustainable energy system. In Malaysia, Tenaga Nasional Bhd (KL:TENAGA) is investing in smart grid technologies to better integrate renewable energy sources, including solar, into the national grid.
Policy and market trends
Government policies and incentives are playing a pivotal role in the solar energy boom. Subsidies, tax credits and renewable energy mandates are encouraging investments in solar projects.
The Malaysian government has set a target of achieving 31% renewable energy capacity by 2025, with solar energy playing a crucial role in this transition. Moreover, corporate investments and partnerships are accelerating the deployment of solar technologies. In 2023, Malaysia’s solar capacity was projected to add 493 megawatts (MW), demonstrating a robust growth trajectory.
Government policies and market dynamics are pivotal in shaping the solar energy landscape. In Malaysia, the government has set ambitious targets for renewable energy, aiming to achieve 31% renewable energy capacity by 2025.
Solar energy plays a central role in this vision, supported by policies such as the large-scale solar (LSS) programme, which facilitates the development of LSS farms through competitive bidding processes. Additionally, the net energy metering (NEM) scheme allows homeowners and businesses to offset their electricity bills by exporting surplus solar energy back to the grid.
Tax incentives and subsidies further enhance the financial attractiveness of solar investments. The Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) encourage private sector participation in green technologies. These incentives are complemented by the Sustainable Energy Development Authority (Seda), which oversees the growth of Malaysia’s renewable energy sector.
Corporate and international collaborations also play a significant role in advancing the solar market. Foreign direct investment in Malaysia’s solar industry is increasing, with major global players establishing manufacturing and research facilities in the country. Furthermore, corporate power purchase agreements are gaining traction, enabling businesses to procure clean energy directly from solar developers. In 2023, Malaysia added 493MW of solar capacity, reflecting robust growth driven by these policy and market frameworks.
On the international stage, Malaysia is positioning itself as a regional leader in solar energy. The country’s strategic location, skilled workforce and supportive policies make it an attractive hub for solar manufacturing and export, further boosting the industry’s prospects.
Future directions
Looking ahead, several trends and innovations will shape the future of solar energy. Next-generation solar technologies, such as quantum dot solar cells and solar fabrics, promise even higher efficiencies and new applications.
The rise of decentralised energy systems and community solar projects will democratise access to solar power, allowing more people to benefit from clean energy. Additionally, the integration of solar with other renewable sources, like wind and hydro, will create robust hybrid energy systems.
By 2030, decentralised energy systems could account for a significant portion of Malaysia’s electricity capacity, highlighting the shift towards more localised and resilient energy solutions.
The future of solar energy is bright, with technological advancements, cost reductions and supportive policies driving its growth.
As we move towards a sustainable future, solar energy will play a crucial role in achieving global climate goals and transitioning to a clean energy economy.
In Malaysia, continuous innovation and investment in solar technologies will harness the full potential of the sun and power a brighter, cleaner world.
Raj Ridvan Singh is the founder and chief executive officer of SOLS Energy.
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