MBSB Research has on Wednesday maintained its positive stance on the renewable energy subsector, underpinned by the structural policy tailwinds for a deep decarbonization trajectory in line with the targets under National Energy Transition Roadmap (NETR).

An overarching goal is raising the renewable energy capacity mix to 70 percent by 2050 from 23 percent in 2020 which necessitates a more than quadrupling in annual renewable energy installations to 2.2GW/annum by 2050, the research house said in an note.

“We view that this will continue to be dominated by solar, which is now shifting towards hybrid solar-plus-storage projects,

“Battery energy storage system (BESS) is now becoming an integral component of new utility-scale renewable generation,” it added.

Meanwhile, Sustainable Energy Development Authority (SEDA) has approved 42 out of 48 applications under the 2026 FiT 2.0 round, representing 331.4MW of net export capacity and 387.4MW of installed capacity.

This is made up of 169.23MW of small hydro (51 percent), 135.9MW of biomass (41 percent) and 26.19MW of biogas (8 percent).

Commercial operation dates (COD) for the plants are expected to be in 2029-2030 and are expected to generate MYR 4.3 billion ($1.05 billion) of investments.

“This marks the largest FiT quota approval to date, as compared to 181.3MW of net exports approved under the 2025 FiT 2.0 round and 299.5MW of installed capacity approved in FiT 2020,

“However, it is notable that of the 331.4MW of net export capacity, only 113.3MW is classified as new applications while 218.1MW relates to capacity-increase applications,” said MBSB.

MBSB is positive on the latest FiT 2.0 2026 awards. According to the research house, Malaysia’s renewable energy scene is dominated by solar, therefore biomass, biogas and small hydro help to improve energy-source diversity and reduces dependence on gas and coal.

It is noted that FiT requires electricity distribution licensees to purchase eligible renewable electricity at an agreed tariff with access to the grid.

Under FiT 2.0, projects receive a prescribed tariff for the first 10 years and the successful competitive bid price for the remaining 11 years of a 21-year agreement.

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