The rapid expansion of renewable energy projects is increasing execution risks related to workforce skills, site safety and contractor management, BIMB Securities said on last Friday.
The research house said in a report that the ability to deliver renewable projects safely, on schedule and within budget was becoming increasingly important as the energy transition accelerated, with human capital and execution controls emerging as key considerations for investors.
“Renewable energy projects are moving faster, but delivery risk is not falling at the same pace,” it said in its report, titled Beyond Megawatts: Assessing Human Capital and Execution Risk in Renewable Energy Delivery.
It said the key risks were no longer limited to access to capital or technology, but increasingly involved whether companies had the skills, safety systems and contractor oversight needed to execute projects reliably.
BIMB said the growth in employment highlighted the need to ensure that workforce capability expanded alongside renewable project deployment.
“In renewables, delivery is labor-intensive and site-based, which makes execution discipline and contractor oversight critical,” it said.
For project developers, this means a growing project pipeline could bring greater exposure to work-at-height activities, electrical work, commissioning and complex site coordination.
“If workforce capability does not scale, quality and safety risks rise, and project timelines become less predictable,” the research house said.
The issue is particularly relevant to Malaysia as the country increases renewable energy deployment under the National Energy Transition Roadmap (NETR).
Malaysia is targeting renewable energy to account for 40 percent of electricity capacity by 2035 and 70 percent by 2050. The government said in July 2025 that operational renewable energy capacity had reached 4,571.06 megawatts, with solar accounting for 4,242.85MW.
BIMB said the scale-up would typically involve engineering, procurement, construction and commissioning (EPCC) models, together with layers of contractors and subcontractors.
While such structures can provide flexibility and allow companies to scale project delivery, they can also create gaps in accountability, particularly where oversight is weak.
The research house said weak contractor controls could result in safety incidents, work stoppages, project delays and cost overruns.
It therefore viewed contractor governance as a core execution control rather than simply an environmental, social, and governance (ESG) consideration.
Investor-grade contractor governance should include pre-qualification standards covering safety and labor requirements, mandatory induction and job-specific safety training, audit and inspection coverage, escalation procedures and consequences for repeated non-compliance, BIMB Research said.
It added that companies should also demonstrate whether corrective actions had been effective over time.
Workforce disclosure is another area requiring greater attention, according to the research house.
Companies commonly report the number of employees trained or the number of training programs conducted, but BIMB said investors should place greater emphasis on demonstrated competency rather than training volumes alone.
Relevant disclosures could include role-based capability requirements for site supervisors, safety officers and electrical teams, certification coverage for high-risk activities, certification renewal cycles and evidence that technical capabilities were expanding as project scope increased.
The research house said such information would provide a clearer indication of whether a company’s workforce was equipped to support growth.
“Training metrics matter less than demonstrated workforce competency,” it said.
Safety performance is similarly linked to project execution, according to BIMB.
Renewable projects can involve work at height, electrical hazards, heavy equipment and multiple contractors operating simultaneously at a site.
BIMB said robust occupational safety and health systems could therefore affect not only employee welfare but also project reliability and operational continuity.
Among the practical indicators investors should monitor are site safety routines, supervision, near-miss reporting, corrective-action processes and safety performance trends.
Contractor safety performance should also be disclosed separately where possible, rather than being incorporated only into employee safety statistics, it said.
Without such information, investors may find it difficult to determine whether an expanding project pipeline is accompanied by increasing operational disruption risk.
BIMB also highlighted grievance mechanisms as an important early-warning tool.
Operational-level grievance channels can allow workers to raise concerns about safety, labor practices or other site-level issues before they develop into larger problems.
The research house noted that international frameworks, including the UN Guiding Principles on Business and Human Rights and OECD due diligence guidance, recognize grievance mechanisms as part of corporate risk-management processes.
For investors, the effectiveness of such systems depends on whether access extends to contractor and subcontractor workers, whether non-retaliation protections are clear, and whether companies disclose how grievances are investigated and resolved.
The report also assessed renewable energy companies through a FTSE4Good lens, which incorporates areas including labor standards, human rights, health and safety and supply-chain oversight.
BIMB said policy commitments and disclosures alone were insufficient to demonstrate effective execution controls.
“Policy disclosures alone are insufficient without measurable outcomes,” it said, adding that transparency around contractor performance remained a key disclosure gap.
The research house highlighted Solarvest Holdings Berhad as an example of an execution-led renewable energy company whose business model makes workforce capability, safety and contractor governance particularly relevant.
Solarvest is primarily involved in EPCC activities for solar PV systems, including commercial and industrial projects, utility-scale installations and operations and maintenance services. The company has also been expanding into renewable asset ownership and recurring-income businesses.
BIMB said Solarvest disclosed workforce development initiatives covering technical skills, safety awareness and operational readiness, including occupational safety and health, solar installation and maintenance and regulatory compliance.
However, it said public disclosures remained largely qualitative, with limited information on training outcomes by role, certification coverage for high-risk work and structured progression pathways for technicians and supervisors.
BIMB nevertheless said greater disclosure on multi-year safety trends, contractor versus employee incidents, near-miss reporting and corrective-action effectiveness would provide investors with better visibility into safety performance as project activity expands.
On contractor governance, Solarvest discloses expectations covering ethical conduct, safety compliance and labor standards, alongside whistleblowing and grievance channels.
However, BIMB said information remained limited on contractor pre-qualification criteria, site audit coverage, non-compliance trends, remediation timelines and contractor-specific safety performance.
The research house said this made it harder for investors to directly assess whether contractor governance was keeping pace with business expansion.
Overall, BIMB said workforce capability, safety systems and contractor governance should increasingly be viewed as leading indicators of execution quality in renewable energy.
As renewable deployment accelerates, companies with stronger operational controls may be better positioned to manage the complexity associated with larger project pipelines, multiple contractors and increasingly specialized technical requirements, it said.
The report concluded that sustainable growth in renewable energy would depend not only on adding megawatts, but also on ensuring that the people, processes and controls required to deliver those projects could scale alongside them.
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