Malaysia’s solar engineering, procurement, construction and commissioning (EPCC) sector could secure MYR 18 billion ($4.42 billion) to MYR 28 billion worth of contracts in 2027 and 2028, driven by accelerating demand for renewable energy from data centers and the rollout of the country’s largest utility-scale solar program, Maybank Investment Bank said on Monday.
In a research report, Maybank IB said the Corporate Renewable Energy Supply Scheme (CRESS) acceleration package and the Large Scale Solar 6 (LSS6) programme would create significant opportunities for solar EPCC contractors, particularly those with established track records, strong balance sheets and experience in high-voltage grid connections.
The bank estimates that CRESS could generate MYR 9 billion to MYR 18 billion in near-term EPCC opportunities, while LSS6 could contribute another MYR 9 billion to MYR 10 billion.
The CRESS acceleration package, introduced to encourage earlier project completion, reduces the developer system access charge (SAC) from 20 sen per kilowatt-hour (kWh) to 14 sen/kWh for eligible projects that achieve commercial operation by December 2028. An additional 4 sen/kWh Green Consumer SAC brings the effective charge to 18 sen/kWh, although the latter is subject to revision during each Tenaga Nasional Bhd (TNB) regulatory period.
Maybank IB expects the December 2028 deadline to accelerate the finalization of CRESS projects over the next six to nine months, with construction potentially starting by mid-2027.
Industry checks suggest that 2GW to 4GW of CRESS projects could be finalised in the near term, primarily driven by expansion plans among existing data centre operators targeting energisation in 2028 and 2029.
Assuming EPCC costs of MYR 4.5 million per megawatt of alternating current capacity, this pipeline could translate into MYR 9 billion to MYR 18 billion in potential contracts for solar industry players.
Data centers underpin CRESS demand
Data centers are expected to be a major driver of CRESS adoption as operators seek to secure renewable energy, manage electricity costs and meet decarbonisation targets.
Maybank IB highlighted Tenaga Nasional Berhad (TNB)’s pipeline of 2.7GW in approved electricity supply agreements (ESAs) for data centers, comprising 2.2GW of projects under construction and 500MW with signed ESAs, as a source of near-term demand.
Although these projects may not be subject to the newly introduced mandatory renewable energy requirement, operators could still adopt CRESS to reduce emissions, potentially lower electricity costs and hedge against future tariff increases.
The longer-term opportunity could be considerably larger. Based on industry checks, Malaysia’s Data Center Task Force has received applications for a further 5GW of data centre capacity.
Maybank IB said the requirement for newly approved data centres to procure renewable energy equivalent to 30% of their electricity consumption could support substantial additional CRESS demand from 2028 onwards.
For a 100MW data center operating around the clock, daily electricity consumption would amount to 2,400MWh. Meeting 30 percent of that demand with renewable energy would require about 720MWh daily.
Given that solar farms typically generate electricity at effective peak capacity for about 3.6 to 3.7 hours a day, a solar installation of approximately 200MWp would be needed to produce that amount of energy.
CRESS projects seeking the lower SAC must also integrate battery energy storage systems (BESS) with non-firm renewable sources such as solar and wind. The requirements include storage equivalent to 50% of export capacity for four hours, allowing renewable electricity to be delivered over a longer period rather than being concentrated during daylight hours.
Applying the 30 percent renewable energy requirement to the incoming 5GW data centre application pipeline could catalyze about 10GWp of additional CRESS solar capacity from 2028 onwards, Maybank IB estimated.
Assuming EPCC costs of MYR 3 million per MWp, this could create another MYR 30 billion in potential contracts over the longer term.
Beyond decarbonization, CRESS could offer data center operators greater visibility over electricity costs through power purchase agreements typically lasting 10 to 21 years.
Maybank IB estimates that electricity tariffs for the first batch of CRESS projects could range from 45 sen to 48 sen/kWh for data center customers, comprising 27 sen to 30 sen/kWh payable to renewable energy asset owners and an effective SAC of 18 sen/kWh.
This compares with current average electricity tariffs of about 55 sen/kWh for data centre operators, potentially offering cost savings and protection against future tariff volatility, including movements in TNB’s Automatic Fuel Adjustment mechanism.
LSS6 adds another growth catalyst
Separately, the government’s LSS6 programme is expected to generate another wave of solar EPCC contracts, following the rollout of earlier large-scale solar bidding rounds.
The Energy Transition and Water Transformation Ministry launched LSS6 bidding in July and August 2026, offering a record 2.65GW of solar capacity integrated with about 1.25GW of battery storage.
Maybank IB noted that LSS6 is the first large-scale solar programme in Malaysia to mandate BESS integration, addressing the intermittency of solar generation while supporting grid stability.
The inclusion of battery storage also increases the potential value of contracts for EPCC contractors, as solar projects incorporating BESS typically command contract values about 50 percent higher than standalone solar farms.
The bank expects shortlisted LSS6 bidders to be announced in the first quarter of 2027, with most EPCC contract awards likely to materialize in the second half of 2027.
Based on the proposed solar and storage capacity, the program could generate MYR 9 billion to MYR 10 billion in EPCC opportunities.
Established contractors best positioned
Maybank IB expects established solar EPCC players to be the main beneficiaries of the simultaneous rollout of CRESS and LSS6, given the scale, technical requirements and tight development timelines of the projects.
For CRESS, developers seeking to qualify for the lower SAC must bring projects into commercial operation by December 2028, creating pressure to finalise project arrangements and begin construction promptly.
For LSS6, designated EPCC partners must demonstrate experience in high-voltage grid interconnections of 132kV and above. Project sizes of 50MW to 100MW also favour contractors with sufficient financial resources and execution capabilities.
The combination of renewable energy demand from data centres, incentives for earlier CRESS project completion and the LSS6 rollout is expected to support a strong pipeline of solar development work over the next two years.
While the estimated MYR 18 billion to MYR 28 billion in near-term EPCC opportunities depends on project finalization, implementation and contract awards, the additional demand from pending data center applications could provide a longer-term growth runway for Malaysia’s solar industry.
Malaysia’s solar opportunities to remain robust over the next five years – UOB Kay Hian