By Laverson Bagah and Suzana Ariff Azizan
Shortage of sunlight in Malaysia is like a durian with no smell – unthinkable. The country’s equatorial location gives it consistent, year-round solar exposure, making it one of the most solar-rich nations in the region. On paper, we have everything we need to lead a solar revolution: consistent irradiance, national targets, and profound incentive schemes. But while the sun shines generously, solar adoption among small medium enterprises (SMEs) – the heart of Malaysia’s economy – continues to lag behind.
Accounting for over 97 percent of registered businesses and 38 percent of GDP, SMEs are often hailed as the “backbone” of the Malaysian economy. But in the transition to clean energy, they have largely been left in the dark. Residential homes and large corporations have taken the lead in rooftop solar adoption. SMEs, meanwhile, face structural and systemic barriers that prevent them from tapping into this opportunity.
High upfront costs, fragmented information, technical uncertainty and regulatory red tape are among the most significant challenges. These issues have created hesitation among business owners, many of whom are eager to reduce long-term energy costs and contribute to sustainability goals.
In other words, while Malaysia’s solar future shines brightly in policy documents, it often dims in practice.
For most SMEs, solar take-up is beyond their budgets. While in the longer term there will be cost savings, the initial cost of RM50,000 to RM200,000 is difficult to justify without inexpensive finance. Leasing opportunities and third-party offers exist but are not promoted well and carry high entry barriers. Even if finance is available, SMEs struggle to meet terms of offers or understand technical mumbo-jumbo on contracts.
Then there’s the issue of infrastructure. Many SMEs in Klang Valley operate from rented buildings or old shop lots with limited rooftop access. The result is a “split incentive” where landlords are not motivated to invest in solar panels when the tenants are paying the bills, and tenants have no authority to install systems themselves. These are not new problems, but they remain largely unaddressed.
More than just economic or structural, there is a gap in confidence. Many SME owners are aware of solar energy, but few feel equipped to make the leap. The sense that solar is “not for businesses like mine” is a common refrain that rooted not in apathy, but in lack of targeted outreach and peer support. And while some community-led initiatives and industrial cluster projects have emerged, they are still too few to shift the tide.
Yet, change is possible.
There are SMEs that have successfully pooled resources to develop shared solar facilities, cutting installation costs by up to 30 percent and enabling collective ownership models. Some SMEs have reported significant savings after switching to solar energy, with annual reductions in electricity costs reaching up to RM150,000. These are real instances that challenge the narrative that solar is solely for large corporations or the environmental elites only. The probable impact is not insignificant. Large-scale SME adoption of solar power can significantly push Malaysia’s renewable energy agenda, reduce carbon emissions, and increase business resiliency. It directly contributes to the Sustainable Development Goals – notably SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action).
But to achieve this, systemic change is needed. First, policies must go beyond the use of incentives. Policy must consider the realities of SMEs with their size, shape, and limitations. That means simplifying application processes, offering pre-approved packages for solar installations, and encouraging shared infrastructure paradigms in industrial estates.
Second, the financing aspect itself must be curtailed to SME capabilities. Microloans, rent-to-own deals, or even peer-financing arrangements facilitated by trade associations are examples. GTFS-type programs must not only be technically available but also made more salient and accessible.
Third, awareness must become action. Solar education can’t stop at roadshows. It must enter everyday conversations among business groups, chambers of commerce, and supplier networks. Public agencies must work closely with SME associations to bridge the information gap and create trust.
The truth is, many SMEs are not waiting for change. They are waiting for a chance of a fair and realistic entry point into a cleaner energy future. And in the face of climate uncertainty and rising energy costs, we cannot afford to leave them behind.
Malaysia’s solar future cannot be built by large corporations alone. If we are serious about achieving our renewable energy ambitions, we must bring SMEs into the fold – not as afterthoughts, but as essential partners in the transition. The sun shines on all of us.
The question is: Who gets to use it?
Laverson Bagah and Dr Suzana Ariff Azizan are with the Department of Science and Technology Studies, Faculty of Science, Universiti Malaya.