Fitch: Malaysian solar poised for growth despite record-low tariffs

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
In July, Malaysia's solar capacity was boosted when Scatec's 66MW facility was switched on. Source: Scatec

Record-low tariffs seen in government auctions this month in Malaysia will not dent the country’s solar growth, according to analysts at Fitch Solutions.

“While a lower bid price for developers suggest that the scope for any margin of error, such as project implementation delays, could adversely hit project economics, we do stress that Malaysia has a relatively favourable investment environment with low political, economic and operating risks compared to regional peers,” communications manager Peter Hoflich told PV-Tech in an email on Monday.

Earlier this month, solar prices dropped to a record low, around the US$40/MWh mark, in the third round of the country’s large-scale solar programme.

A report published by the Singapore-based firm on Friday forecasts that Malaysia’s solar capacity will double from 438MW installed in 2018 to 966MW within ten years.

Hoflich wrote that the prospect of “solar projects remain positive and point to scope for accelerating growth in the market over the coming years.”

The country’s high irradiation levels, its established domestic solar manufacturing sector, and the government’s plan to launch more large-scale solar tenders after the last rounds were significantly oversubscribed will all contribute to growth, according to the report.

It notes that a government push to “improve the competitive landscape for the power sector will also create a more favourable investment environment, giving greater scope for renewables growth when more capacity is procured.” A reform of the Malaysian electricity retail market industry will launch in late 2019, and state-owned energy company Tenaga Nasional Berhad will be restructured by the third quarter of 2020.

“The increasing liberalisation bodes well for private investments, and could improve competition and investments in the sector,” the report reads.

In July, Scatec Solar’s connected its 66MW Merchang project to the grid.

Read Next

PV Tech Premium
May 14, 2021
While foreign investors are said to be flocking to Greece’s solar sector, project developers are struggling with headwinds in the form of grid access challenges and local resistance to new renewables plants. Jules Scully looks at how these hurdles are affecting PV deployment in the country.
PV Tech Premium
April 30, 2021
‘Solar Module Super League’ (SMSL) member First Solar has hit a nameplate Series 6 CdTe thin film manufacturing capacity of 7.9GW in the first quarter of 2021, after ramping its second and last converted factory in Malaysia.
April 26, 2021
Germany’s renewable energy sector has said new government plans to more than triple the PV capacity included in next year’s auctions do not go far enough in supporting long-term solar deployment.
April 14, 2021
While recent solar auctions in Spain and Portugal have made headlines with low prices and high levels of participation, the power purchase agreement market will be key to helping both countries reach their 2030 solar deployment targets, it was suggested during a panel discussion.
April 9, 2021
LONGi Solar will supply its high-efficiency modules to two projects in Malaysia totalling 190MW that were awarded in the third round of country’s large-scale solar tender programme.
April 6, 2021
SunPower is to allow Maxeon Solar to the Performance Series (P Series) p-type mono-Passivated Emitter Rear Cell (PERC) shingled PV modules into the US market as part of a major change to initial manufacturing agreements.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
May 26, 2021
Session 1 - 7:00 AM (BST) | Session 2 - 5:00 PM (BST)
Solar Media Events
June 15, 2021
Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021