PV Analysis of the Belt and Road Initiative

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PV Demand Analysis of the Belt and Road Initiative: Malaysia of Southeast Asia

Malaysia Country Profile

Malaysia has a population of 31.6 million. In 2017, the GDP growth rate reached 5.9%, a 40% increase compared to 2015. Both Fitch and S&P have assigned A- rating to Malaysia, reflecting their optimistic attitudes toward Malaysia's economy. However, the debt issue has been an urgent problem for the Malaysian government.

Located in Southeast Asia, Malaysia has abundant sunshine. The average daily solar radiation in Malaysia reached 4.21kWh to 5.56kWh per square meter. Solar PV is the most well-dveloped renewable energy in Malaysia. By 2017, the cumulative grid-connected installation reached 380MW under FIT Policy.

Renewable Energy Development in Malaysia

Malaysia’s renewable energy development plan is implemented in accordance to the Action Plan 2009, which comprises of two major policies. First of which is Renewable Energy Act 2011 (Act 725) stipulating to promote renewable energy development through FIT and related measures.

The second of which is Sustainable Energy Development Authority Act 2011 (ACT 726), which aims to establish Sustainable Energy Development Authority (SEDA) for managing and promoting renewable energy development.

By late 2017, the cumulative renewable energy installation applicable for FIT reached 563MW, of which PV is the most well-developed. The cumulative PV installation reached 380MW, taking up 67% of the total installation in Malaysia. Next is biomass, with a cumulative installation of 96.8MW, representing 17% of the total installation. Moreover, PV also has the best performance in power generation among all renewable energy projects.

Malaysia Cumulative installed capacity of renewable energy

Source:Seda Malaysia

PV Policy of Malaysia

Malaysia has put a lot of emphasis on PV development. In addition to the FIT applicable for all renewable energy projects, Malaysia also introduced the Net Energy Metering and Large-Scale Solar (LSS) Plans in 2016 to promote the industry development.

Feed-in Tariff, FIT (Application ended in late-2017)

Malaysia’s FIT is applicable for all renewable energy projects, of which, PV has the highest subsidy. But due to the capital limitation and in pursue of a balanced renewable energy development, the FiT has slowly declined on a yearly basis. Taking project with an installed capacity of below 4kW for example, the FIT has dropped from 1.23 ringgit/kWh (about US$29.4 cents/kWh) in 2012 to 0.6682 ringgit/kWh (about US$16 cents/kWh) currently, a 45% dip.

Malaysia Fit policy

However, pressured by the capital, the Malaysian government announced in September 2016 that it will close the FIT application for PV by late 2017. FIT will be replaced by the Net Energy Metering and LSS plans which were launched in 2016.

Net Energy Metering, NEM

The Sustainable Energy Development Authority (SEDA) launched the Net Energy Metering plan in 2016. The plan aims to install 500MW of capacity by 2020. The purpose of the policy is to put self-consumption into practice and reduce financial burden. But by now, two years after the policy was announced, the actual approved installation only reached 8MW. In other words, the policy didn't lead to positive outcome.

Large Solar Scale, LSS

The Large Solar Scale (LSS) was initiated in 2016. The plan aims to install 1,200 MW of capacity by 2020. This April, the Sustainable Energy Development Authority unveiled that utility-scale solar projects with a total of 1,228MW of capacity has been tendered, showing an outcome better than expected.

PV Development in Malaysia

Malaysia is positioned as an OEM role in the global PV supply chain. More than 90% of the local PV products are exported to Europe, the U.S., and Asia. Many PV companies like Longi, JA, Jinko, First Solar, Hanwha, and OCI have built production sites in Malaysia as a base for export.

Stimulated by the Act 725 in the past, PV enjoys a high subsidy rate, leading to stable demand for PV every year. But new policies were only announced in late 2016 while it takes time to implement new policy, therefore most of the installation was supported by the FIT policy by the end of 2017.

Malaysia Cumulative PV Capacity in Fit Policy

Source:整理自 Seda Malaysia 官方网站

Import Analysis in Malaysia

Analysis of Mono and Multi

From January 2017 through August 2018, Malaysia has high demand for Chinese multi products, taking up 61% of the total Chinese export to Malaysia. Mono products represent 39% of the total export.

Malaysia Multi Mono proportion

Analysis of the Type of Chinese Module Export to Malaysia

If conducting a comparison between the 2017 and the period from January-August 2018, we can see that shipment has increased significantly. By August 2018, the shipment has increased 215MW from 2017. Meanwhile, the production ratio of multi products has also scaled up substantially. It’s estimated that PV installation will grow significantly in 2018 and 2019 in Malaysia.

China Export to Malaysia Shipment


Since the launch of Act 2011, Malaysia’s PV has become the most well-developed sector among all renewable energies. Currently, PV can no longer enjoy high subsidies but new policies. Future demand will focus on self-consumption and LSS.

2020 is the deadline for projects to complete grid-connection, and thus we can look forward to a boom in installation that year. To conclude, Malaysia’s prospect is promising. Demand will remain stable before late 2020. Malaysia will also come up with new policies to promote PV development after 2020.

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