More Than Solar: Biomass & Other Renewable Energy in Malaysia

Solar remains the most visible renewable option in Malaysia, but it is no longer sufficient on its own for many businesses.

Key pressures driving diversification include:

• Rising electricity tariffs and fuel price volatility
• ESG reporting and sustainability disclosure requirements
• Land and roof space limitations for further solar expansion
• Operational risks caused by intermittency, especially for 24/7 operations

For factories, agro-processors, and continuous-process industries, renewable diversification is now a business resilience decision, not just a branding exercise.

(Source: Sustainable Energy Development Authority Malaysia; Energy Commission Malaysia)

What Counts as Renewable Energy other than Solar?

Renewable energy refers to power generated from naturally replenishing sources with lower long-term environmental impact.

In Malaysia, non-solar renewable energy commonly includes:

• Biomass
• Hydro
• Wind
• Biogas
• Waste-to-energy (WtE)

For operations, the key distinction is:

• Intermittent sources: solar energy, wind
• Baseload or firm sources: biomass, biogas, hydro, some WtE

This firm vs intermittent characteristic often determines whether a renewable system stabilises or complicates your production schedule.

(Source: International Renewable Energy Agency; Sustainable Energy Development Authority Malaysia)

Malaysia’s Renewable Energy Position in 2026: The Numbers That Matter

As of 2023, Malaysia’s power system can be broadly summarised as:

• Total installed capacity: around 33 GW
• Renewable share of installed capacity: about 26%
• Targets: 31% renewables by 2025, 40% by 2035, and around 70% by 2050 in installed capacity

Within this renewable mix:

• Large hydro provides the largest share of installed renewable capacity and most renewable electricity
• Solar PV is the fastest-growing technology through programmes such as Large-Scale Solar (LSS) and Solar ATAP
• Biomass, biogas and mini-hydro contribute a smaller capacity share, but are strategically important near agro-industrial clusters

Overall, most electricity is still generated from coal and natural gas, but national roadmaps clearly position bioenergy and waste-derived energy as part of the long-term mix, not add-ons.

(Source: SEDA Annual Report 2023; Malaysia Renewable Energy Roadmap; IRENA Malaysia Energy Transition Outlook 2023)

For businesses, this means renewable energy (including non-solar options) is fast becoming an expected baseline in policy, finance and ESG.

Types of Renewable Energy Available in Malaysia Other than Solar

Biomass Energy

Biomass converts organic material into heat or electricity.

Common Malaysian feedstock:

• Palm kernel shells
• Empty fruit bunches (EFB)
• Mesocarp fibre
• Rice husk
• Wood and timber processing waste

Typical business use cases:

• Manufacturing plants with high thermal demand
• Palm oil and agro-processing facilities
• Industrial boilers and combined heat and power (CHP) systems

(Source: Malaysian Palm Oil Board; Malaysia Renewable Energy Roadmap)

Hydro Energy

Hydropower uses flowing water to generate electricity.

In Malaysia:

• Large-scale hydro is concentrated in East Malaysia, especially Sarawak
• Mini and micro-hydro serve regional and rural needs
• Hydropower is highly reliable but strongly location-dependent and capital-intensive

Land, environmental and social considerations mean hydro is more of a system-level resource than a direct on-site option for most individual businesses.

(Source: Tenaga Nasional Berhad; Sarawak Energy; Ministry of Energy Transition and Water Transformation)

Wind Energy

Wind potential in Malaysia is limited but not zero.

Best niches include:

• Certain coastal locations
• Islands and selected elevated sites
• Hybrid systems paired with solar and storage

However, low average wind speeds mean wind is rarely a standalone option for industrial loads and is more suited to niche, small-scale or demonstration projects.

(Source: International Renewable Energy Agency; Energy Commission Malaysia)

Biogas and Waste-to-Energy

Biogas and WtE convert waste into usable energy.

Common sources:

• Palm oil mill effluent (POME) and other industrial organic waste
• Landfill gas from municipal solid waste
• Wastewater treatment by-products

For businesses, these systems can:

• Reduce waste disposal and effluent treatment costs
• Transform compliance obligations into energy assets
• Support measurable circular economy and emissions reductions

Malaysia plans to build multiple WtE plants in Peninsular Malaysia and already operates several landfill gas-to-energy projects feeding power into the grid.

(Source: Solid Waste Management and Public Cleansing Corporation; Ministry of Local Government Development; SEDA Malaysia)

Why Biomass Deserves Special Attention in Malaysia

Strategic Fit with the Malaysian Economy

Among non-solar renewables, biomass is uniquely aligned with Malaysia’s agricultural and industrial structure.

Key reasons:

• Large, continuous biomass streams from the byproducts of palm oil, timber and agro-processing
• Ability to provide firm, high-load power or steam for industrial users
• Direct contribution to waste reduction and circular economy targets
• Lower volatility due to weather compared with solar and wind

For many businesses, biomass offers a rare combination: energy security plus waste management in a single investment.

(Source: Malaysian Palm Oil Board; Ministry of Energy Transition and Water Transformation)

Malaysia’s Biomass Resource in Numbers

The case for biomass is grounded in scale:

• Malaysia is one of the world’s top palm oil producers, and palm residues are its dominant biomass resource
• National-level estimates indicate very large volumes of biomass waste annually, with palm oil residues (EFB, fibre, PKS and POME) making up the bulk
• Additional biomass streams arise from timber, rice milling, rubber and organic municipal waste

For businesses located within or near these resource clusters, this can translate into:

• Significant displacement of LNG, diesel or fuel oil
• Lower waste handling and disposal costs
• Stronger ESG disclosures supported by hard data on recovered waste and avoided emissions

(Source: Malaysian Palm Oil Board; oil palm biomass studies; national biomass assessments)

How Malaysian Businesses Can Benefit From Non-Solar Renewable Energy

Adopting non-solar renewables can create benefits on several fronts.

Operational:

• Reduced exposure to tariff changes and fuel price swings
• More stable and predictable energy supply for 24/7 operations
• Better long-term planning for capacity and maintenance

Strategic:

• Stronger ESG reporting and climate disclosures
• Better alignment with regulators, lenders and export markets
• Differentiation with customers and supply chain partners

Financial:

• Potential long-term cost advantages once capital is recovered
• Monetisation of waste streams and by-products
• Access to green financing and incentives linked to low-carbon investments

(Source: Malaysia Green Technology and Climate Change Corporation (MGTC); Ministry of Investment, Trade and Industry)

Solar vs Biomass vs Hydro vs Wind

Real-World Business Use Cases in Malaysia

Common implementations across Malaysia include:

• Manufacturing plants installing biomass boilers to reduce fuel oil or gas dependence
• Palm oil mills capturing POME biogas to generate power and steam
• Agro-based companies turning processing residues into on-site energy and grid exports
• Industrial estates combining solar, biomass or biogas, and grid power in hybrid systems

The strongest projects are those that start with realistic resource and feasibility assessments, rather than chasing incentives alone.

(Source: Ministry of Investment, Trade and Industry; Malaysia Green Technology and Climate Change Corporation (MGTC))

What Businesses Should Evaluate Before Choosing a Renewable Energy Type

Before deciding on a technology, businesses should evaluate:

Resources:

• On-site or nearby feedstock and its long-term reliability
• Roof and land area for solar or compact solutions

Financials:

• CAPEX, OPEX and financing options
• Sensitivity of savings to fuel prices and tariffs
• Payback period and IRR under conservative assumptions

Regulation and Operations:

• Licensing, environmental approvals and grid connection
• Integration with existing processes and utilities
• Maintenance, staffing and downtime risks

(Source: Energy Commission Malaysia; Department of Environment Malaysia; SEDA Malaysia)

Matching Technologies to Typical Malaysian Business Profiles

• Palm Oil Mills and Agro-Processors: Best-fit options include biomass boilers, CHP, and biogas from effluent. High, concentrated biomass streams and year-round operations make these sites ideal for on-site bioenergy.
• Energy-Intensive Manufacturing (e.g. food, cement, chemicals): Hybrid systems that pair solar with biomass or biogas can cover both daytime and night-time loads. Third-party biomass fuel supply is often feasible within a practical logistics radius.
• Urban Commercial Buildings, Logistics Hubs, Data Centres: Rooftop solar, parking-lot solar and corporate RE contracts backed by off-site hydro or bioenergy are typical. These sites have limited on-site waste but high ESG visibility and strong demand for verifiable green electricity.

(Source: Malaysia Renewable Energy Roadmap; IRENA Malaysia scenarios; corporate RE schemes in Malaysia)

National Renewable Energy Policies Shaping Business Decisions in 2026

Malaysia now has a coherent framework for renewables rather than isolated schemes.

Key elements include:

• Renewable Energy Act 2011 (Act 725) – legal basis for the Feed-in Tariff (FiT) covering biomass, biogas, small hydro, solar PV and other eligible resources
• Malaysia Renewable Energy Roadmap (MyRER) – sets technology pathways and targets of 31% RE capacity by 2025 and 40% by 2035
• National Energy Transition Roadmap (NETR) – outlines a long-term move towards around 70% RE capacity by 2050, with clear roles for bioenergy and WtE
• Corporate Renewable Energy Supply Scheme (CRESS) – allows larger users to procure green electricity through open grid access from licensed generators
• Bursa Malaysia sustainability and climate disclosure requirements – raise expectations on listed companies and their supply chains to show credible decarbonisation plans

(Source: Renewable Energy Act 2011; MyRER; National Energy Transition Roadmap; Single Buyer CRESS; Bursa Malaysia Sustainability Reporting Guide)

Together, these policies affect investment decisions, financing access, and reporting obligations, and they clearly recognise non-solar renewables alongside solar.

Common Misconceptions About Biomass and Alternative Renewables

Frequent misconceptions include:

• “Biomass is inherently dirty” – in reality, emissions depend on technology, combustion quality and emissions control, not the concept of biomass itself
• “Incentives guarantee profitability” – project economics still hinge on feedstock logistics, plant performance and realistic assumptions
• “Renewables are ‘set and forget’” – all systems, especially firm renewables like biomass, require proper operations, maintenance and monitoring

Most failures come from weak planning and execution, not from renewables being fundamentally unsuitable.

(Source: International Energy Agency; Energy Commission Malaysia; biomass project case studies)

How Businesses Should Decide Which Renewable Energy Fits Best

A practical decision sequence:

1. Map your actual energy demand and load profile (hourly, daily, seasonal; thermal vs electrical).
2. Identify available resources and waste streams, plus land and roof constraints.
3. Check regulatory requirements, incentives, and grid-connection options.
4. Model long-term operational impact and risks, not just first-year savings.
5. Align choices with ESG and stakeholder expectations, especially if you are export-oriented or listed.

Renewable energy should strengthen your core operations and competitiveness, not create new technical or regulatory headaches.

(Source: International Renewable Energy Agency; Malaysia Green Technology and Climate Change Corporation (MGTC))

Renewable Energy in Malaysia Is No Longer Solar-Only

Malaysia’s renewable energy landscape has moved beyond a solar-only story. Biomass, biogas, hydro and waste-to-energy now offer credible, scalable options for businesses willing to plan carefully and think beyond rooftop panels.

Winning strategies typically involve:

• Combining solar with firm renewables like biomass or biogas
• Treating waste and by-products as potential energy assets
• Aligning projects with national policy, financing and ESG trends

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Disclaimer: This article is for general information only and does not constitute financial, legal, technical, or investment advice. Businesses should consult qualified professionals and refer to the latest Malaysian regulations, incentives, and site-specific feasibility studies before making any energy-related decisions.