Maybank Investment Bank has remained optimistic on Malaysia’s renewable energy (RE) sector in 2026 as projects under Large Scale Solar 5 (LSS5), LSS5+, Malaysia’s Battery Energy Storage System (MyBeST) and Corporate Renewable Energy Supply Scheme (CRESS) enter into engineering, procurement, construction, and commissioning (EPCC) execution phase supporting earnings outlook of most RE EPCC players.

The research house said in its recent report that to sustain the momentum of the RE installed capacity, LSS5, LSS5+ and MyBeST are expected to collectively convert into MYR 13 billion ($3.21 billion) to MYR 14 billion ($3.45 billion) worth of EPCC opportunities for the sector.

“Looking ahead, to sustain the momentum of RE installed capacity to achieve 40 percent by 2035 the government has announced the expected launch of LSS6 (2GW) in 2026, quota bidding is expected to launch in the first quarter of 2026 while bidding finalizing is expected in the third quarter of 2026,

“With industry widely anticipate mandatory integration for LSS6 projects, we expect LSS6 to translate into MYR 6 billion ($1.48 billion) to MYR 8 billion ($1.97 billion) worth of EPCC opportunities,” it added.

Maybank is also expecting a recovery in residential rooftop solar adoption in 2026 following the introduction of the new Solar Accelerated Transition Action Program (Solar ATAP) in December, 2025.

According to the research house, the policy gap between Net Energy Metering 3.0 (NEM 3.0) and Solar ATAP has led to most prospective residential users to delay installations in the second half of 2025.

Elsewhere, the expected introduction of Carbon Tax in 2026 is expected to spur greater adoption of rooftop solar among commercial and industrial (C&I) segment as businesses accelerate decarbonization efforts to meet industry benchmarks, it noted.

While EPCC work on LSS5 and LSS5+ will remain the key earnings driver, Maybank anticipates that Battery Energy Storage Systems (BESS) integration will become a standard requirement in most new RE programs (including recent MyBeST, CRESS, and Solar ATAP), aligning with critical grid firming initiatives.

“This transition presents a significant opportunity for RE players to develop a robust track record in BESS system design and integration,” it said.

It also highlighted that this differentiation is crucial, as it will position these EPCC players for higher success rates in securing future contracts and enable them to command better margins, given the current scarcity of proven utility-scale BESS track records within the industry.

In retrospect, core earnings for the RE players under its coverage rose 63.6 percent year on year in the first nine months of 2025, driven primarily by the execution of utility-scale Corporate Green Power Program (CGPP) projects and rooftop solar projects for residential and C&I users under the NEM 3.0 program.

Several RE initiatives were announced in 2025 to accelerate RE installed capacity.

These include the largest ever annual quota of 4GW under the LSS5 and LSS5+, utility-scale (BESS) projects under MyBeST bidding (400MW/ 1600MWh), and the Solar ATAP which replaces NEM 3.0 scheme that expired in Jun, 2025.

The CRESS have also seen better adoption rate with the formation of several consortiums pursuing sizable pipeline, including Gamuda-SD Guthrie (1.2GW), Gamuda-Gentari (1.5GW), and Solarvest- Brookfields (1.5GW).

Overall, the key risks for the sector including the volatility in solar-related material cost which could hamper EPCC project margins; project execution delays which could affect recognition timing, and stiff competition in the EPCC segment which may lead to margin pressure.

Analysts foresee Malaysia’s energy transition to sustain momentum moving into 2026