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December 12, 2025
Tenaga trends: how we’re monitoring Malaysia’s evolving rooftop solar landscape
Insights from TransitionZero’s latest imagery ahead of the upcoming Solar ATAP scheme
Summary
The Malaysian government has long placed emphasis on rooftop solar as a key power system decarbonisation pathway; however, supporting policies have delivered only moderate success, with uptake consistently falling short of expectations.
TransitionZero’s enhanced methodology for estimating rooftop solar installations identifies 1.75 GW of installed rooftop solar capacity nationwide, with 80% concentration in the industrial states Selangor, Johor, Kedah and Pulau Pinang.
The approach can be applied at a regular cadence to monitor the effectiveness of new policies such as Solar ATAP and CREAM, given the usual delay in official disclosures.
Introduction
On 1 January 2026, Malaysia will launch the Solar Accelerated Transition Action Programme (Solar ATAP), potentially marking a new phase of rooftop solar development in Peninsular Malaysia. The programme builds on the earlier Net Energy Metering (NEM) scheme and further expands the suite of regulatory mechanisms supporting rooftop solar adoption, an area where progress has remained modest despite multiple rounds of policy intervention.
According to the latest statistics by the Energy Commission (ST), as of July 2025, rooftop solar capacity stood at 1.72 GW, accounting for 40% of Malaysia’s total installed solar capacity.
However, the disclosure offers limited visibility into the broader landscape. Key questions remain: How are these installations distributed geographically across Malaysia? Which regions or consumer segments are driving uptake? Given the several policy schemes introduced in 2025, how can market participants track build-out and monitor momentum, especially when official disclosures are irregular and often lag behind real-world activity?
To help bridge this information gap, this data project by TransitionZero’s Machine Learning team aims to provide a clearer picture of Malaysia’s rooftop solar landscape. The work forms part of a broader initiative covering Southeast Asia and South Asia, which seeks to establish a replicable methodology for assessing how policy and market developments translate into measurable rooftop solar growth.
The rooftop solar stalemate in Malaysia
Malaysia lags behind its regional peers in overall solar adoption, despite substantial technical potential and urgent decarbonisation needs. Regulators have long placed strong emphasis on rooftop solar as a key deployment pathway alongside large-scale solar farms, introducing dedicated mechanisms as early as 2016. However, supporting policies have delivered only moderate success, with uptake consistently falling short of expectations.
Similar to planners and utilities elsewhere, Malaysian authorities remain cautious about grid congestion risks associated with high levels of utility-scale solar farms. Rooftop solar, by contrast, offers a mitigation pathway to scale up renewables by generating clean electricity closer to demand and reducing strain on the transmission network.
Looking back, Malaysia’s rooftop solar policies can be characterised by continuous experimentation, refinement, and managed scale-up, yet without the breakthrough needed to unlock widespread adoption.
Three iterations of the NEM scheme – the most consequential rooftop solar mechanism to date – were rolled out sequentially and continuously refined to encourage participation. Regulators responded to market signals by shifting from the initially unattractive buy-back rate to a true net metering approach with one-for-one offsetting. Uptake, however, remained constrained by the quota-based design of each NEM cycle.
In the third round, the 2,500 MW development quota was divided by consumer groups – residential, government premises, and commercial and industrial (C&I) – with differentiated system size limits and buy-back mechanisms. According to SEDA, while the first two segments nearly exhausted their quotas, only 80% of the C&I allocation was subscribed, indicating weaker interest from this segment.
In March 2025, in another effort to stimulate uptake, ST launched the Community Renewable Energy Aggregation Mechanism (CREAM), effectively enabling deployment at scale. Specifically, the scheme allows homeowners to lease their rooftop space to specialised developers or aggregators, who then generate and sell electricity within the distribution network. The impact remains to be seen.
Following NEM 3.0, which concluded in June 2025, the Solar ATAP programme is set to be released in January 2026. While detailed guidelines are still pending, official and market disclosures suggest the design will support the long-term sustainability of the programme through a market-based export rate, uncapped development quota, and expanded system size limits to match up to 100% of the host’s maximum demand.
Mapping Malaysia’s rooftop solar
Amidst this policy landscape and in anticipation of the upcoming market response, TransitionZero’s Machine Learning team developed an enhanced methodology to estimate rooftop solar build-out in Malaysia. The approach aims to balance cost, accuracy, scalability, and replicability, and was first deployed in our report estimating the capacity of rooftop and ground-mounted distributed solar in Pakistan. This was followed by a second report for Vietnam, which identified 6.93 GW of installed rooftop solar capacity nationwide.
This initiative provides a way to take stock of the current rooftop solar situation in Malaysia and can be repeated in the near future to track progress as needed.
Because acquiring high-resolution imagery for the entire country would be prohibitively expensive, we instead purchased detailed images for selected representative areas across Malaysia. Approximately 1,500 images were procured, 95% of which were taken between March 2024 and September 2025. The sampling offers reasonable coverage, recency, and visibility into the impact of the NEM programmes.
Within these samples, we identified and labelled solar installations, examining how installation rates vary by building size, region, and urban or rural setting. Analysis of these labelled datasets was then used to develop an extrapolation model that estimates rooftop solar capacity across Malaysia and at state level.
The detailed technical methodology can be found here.
What we found
The results were mapped using a hexagonal grid to visualise how rooftop solar capacity is distributed across Malaysia. In the heatmap below, taller, darker hexagons represent areas with higher estimated rooftop solar capacity, with the values adjusted to make differences easier to see.
Following this methodology, we estimate 1.75 GW of installed rooftop solar capacity across Malaysia, broadly consistent with official statistics.
To account for uncertainties such as labelling confidence, panel efficiency, sampling bias, accuracy of external datasets and panel tilt, an error margin of 16% was applied. This yields an estimated range of 1.47 GW - 2.03 GW of rooftop solar capacity nationwide.
The table below shows a breakdown by state.
As expected, almost all rooftop solar installations are found in Peninsular Malaysia, with negligible detections in Borneo island. The highest concentrations appear in states such as Selangor, Johor, Kedah and Pulau Pinang, which correspond to Malaysia’s major industrial hubs.
Among the top states with available imagery, we found that Pulau Pinang shows a significantly higher rooftop solar installation rate than other regions. This means that for the same square meter of available rooftop area, the installed solar system size is substantially larger — approximately 3-4 times higher — than in Selangor and Kuala Lumpur, depending on building size.
Compared to Southeast Asian peers, Malaysia’s rooftop solar installation rate differs markedly from Vietnam’s. Particularly, the correlation between solar coverage and building rooftop area is far less pronounced in Malaysia.
As rooftop size increases, the likelihood of a building hosting solar rises more gradually, compared to the steep incline seen in Vietnam. This indicates the relatively low rate of uptake among Malaysia’s large industrial and commercial buildings. The overall coverage in Malaysia is also consistently lower across all building sizes versus its neighbour. This demonstrates the country’s comparatively lower solar adoption, regardless of the sector.
What's next?
Malaysia aims to achieve 70% renewable energy penetration by 2050. Yet near-term deployment targets and prospects remain unpromising, despite rapidly growing electricity demand, increasing reliance on imported fossil fuels, and a commitment to phase-out coal.
With an estimated 42 GW of technical potential, rooftop solar can play a meaningful and cost-efficient role in Malaysia’s energy transition. However, the impact of the latest and upcoming policy initiatives is still unfolding. Whether the Solar ATAP scheme will generate stronger momentum, or whether the revised retail tariff structure will improve the investment case for rooftop solar, remains to be seen.
Tracking how the market responds – promptly and consistently – can help inform faster policy adjustments, particularly as Malaysia must accelerate renewable energy deployment to meet rising clean energy demand.
*Note: All solar capacities expressed in this blog are in alternating current (AC).
This is the third in a series of blogs presenting our findings of the status of rooftop solar deployment in Southeast Asia and South Asia. Check out our blogs on Pakistan and Vietnam, and stay tuned for upcoming analyses featuring Thailand, Indonesia, and Bangladesh.
