Floating solar is emerging as a strategic solution to achieve Malaysia’s push to reach 70 per cent renewable energy capacity by 2050, amid land scarcity, environmental sensitivities, and grid constraints that limit the expansion of land-based solar projects.
Malaysia’s rapid solar expansion in recent years has brought land availability into sharper focus since large-scale solar farms require extensive, contiguous tracts of land close to grid infrastructure that is increasingly becoming scarce in many parts of the country.
Floating photovoltaic (FPV) systems, installed on reservoirs, dams, and mining ponds, have the potential to unlock gigawatts of solar capacity without competing with other land uses, while complementing existing hydropower assets, said industry experts.
Adely Kassim, lead engineer at Blueleaf Energy, a pan-Asian renewable energy platform, said floating solar is becoming a precision tool in Malaysia’s energy transition that can effectively scale renewable power where there is land shortage.
“Malaysia has land constraints, and large tracts of suitable land can be very expensive, especially when close to strong grid zones. Floating solar bypasses land and social constraints by making use of reservoirs, dams, or even mining ponds to add renewable capacity without competing with agriculture, industry, or settlements,” he said.
In some Malaysian states, clearing land for renewable energy projects faces resistance from local communities and environmental groups due to concerns over deforestation, ecosystem disruption, and the displacement of Indigenous communities.
Under Malaysia’s National Energy Transition Roadmap (NETR), solar photovoltaic (PV) is expected to dominate the renewable energy mix over the next few decades, accounting for 58 per cent of total installed capacity.
This is equivalent to around 56 gigawatts (GW) of renewable power. To support the NETR, state utility company Tenaga Nasional Berhad (TNB) is planning to build a 2.5 GW of hybrid hydro-floating solar (HHFS) at its hydro dam reservoirs to increase renewable energy generation.
Leading renewable companies like Johor Bahru-based Solarvest are also exploring water-based solar alternatives by partnering investors to scale projects throughout the country.
Energy industry expert and managing director of Rosergy Consulting, Rosman Hamzah, acknowledged that achieving Malaysia’s ambitious solar targets would be extremely challenging without tapping into inland water bodies for the same reasons.
Hamzah sees inland water bodies as “a promising solution” to address Malaysia’s land scarcity issues.
“The NETR has identified floating solar technology as a key initiative under its Renewable Energy Lever. Specifically, Initiative RE2 calls for the rolling out of clear guidelines and removal of regulatory barriers that have hindered the development of floating solar,” he said.
He added that the Energy Commission’s distinct bidding categories for floating solar in its Large Scale Solar (LSS) auctions, such as the LSS PETRA 5+ quota of 500 megawatts (MW) for floating solar proposals, marks a significant step forward for this technology.
However, he noted that as of now no formal guidelines have been issued to facilitate or promote deployment of floating solar technology in the country.
Technical and logistical hurdles
Despite its potential, floating solar presents distinct engineering and logistical challenges that must be tackled to ensure success in scaling the technology.
Grid integration remains a key hurdle, particularly for projects that are located far from existing substations.
“Even if a floating solar plant is near a hydropower dam, you can’t simply plug into the hydro station. A dedicated substation and grid studies are still required, which adds cost and complexity,” Kassim said.
Large reservoirs also introduce additional technical challenges, as floating photovoltaic (PV) islands can be located far from shore, requiring long overwater cables. These longer distances increase energy losses and can pose reliability risks.
“In a large dam, PV panels are connected to inverters, then to medium-voltage transformers, and finally to the collector station,” Kassim explained. “The longer the distance, the higher the energy losses.”
To minimise these losses, transformers are typically placed close to the inverters. In very large lakes, this may require floating barges, platforms mounted on the water surface that support electrical equipment such as transformers, allowing voltage to be stepped up closer to the generation point.
Even so, Kassim noted that the remaining distance between transformers and the onshore switchgear or step-up station can still contribute to energy losses.
Beyond electrical design, site access is another major constraint. Many lakes and former mining ponds lack proper access roads or jetties, complicating the transport of floats, anchors, cables, construction equipment, and crews.
Project developers and construction teams must also navigate a complex permitting landscape. This typically involves coordination with dam authorities, who manage the reservoirs, as well as local councils, state governments, and water agencies that vary by state.
“We need more clarity in permitting and responsibilities,” Kassim said. “For example, when building on a reservoir, who is responsible for vegetation management? Standardised rules and template agreements with water asset owners would reduce uncertainty and make projects easier to develop.”
On the environmental and social front, concerns are often raised around water quality, biodiversity, and public access, particularly for reservoirs used as drinking water sources. Both Kassim and Hamzah said these risks can be managed through careful design, regulation, and monitoring.
Kassim, who has worked on several floating solar projects before, said the coverage is typically limited to less than 50 per cent of the water surface and buffer zones from shorelines are maintained.
Large installations are also broken into multiple floating islands, often around 20 MW each, with spacing to preserve water circulation and oxygen exchange.
“We conduct baseline environmental studies and ongoing monitoring tracks water temperature, dissolved oxygen, and chlorophyll levels,” he said, adding that in some cases, floating solar has improved water conditions by reducing algae growth, stabilising temperatures and provide shading crucial for creating habitats for fish.
Cost, scalability, and long-term potential
While floating solar offers clear advantages in land use and siting flexibility, currently it comes with higher upfront costs compared to conventional solar installations.
The primary cost difference is in how the solar systems are built and where they are located. Conventional solar panels are mounted on fixed structures either on rooftops or directly on land. In contrast, floating solar panels are installed on floating platforms that are anchored to the bed below, which naturally incurs additional material and engineering costs, Hamzah said.
However, he noted that these higher costs can be partially offset by stronger performance.
“The cooling effect of the water beneath the panels reduces energy losses, allowing for higher electricity generation compared to traditional solar,” he said, adding that financing conditions are expected to improve as lenders and investors become more familiar with the technology.
“At present, financing and incentives for floating solar projects in Malaysia largely mirror those available for traditional solar. But as this emerging technology matures locally, financing terms are likely to become more competitive, paving the way for broader adoption,” Hamzah said.
In terms of scalability, he highlighted that floating solar has a clear structural advantage as the flat, unobstructed surface of water bodies allows for easier and more extensive system expansion compared to ground-mounted or rooftop solar, which are often constrained by land availability and structural limitations.
Citing the Malaysia Renewable Energy Roadmap (MyRER), he said the country has an estimated 16.6 GW of floating solar potential at hydroelectric plants and dam reservoirs alone, making long-term deployment substantial.
From a developer’s perspective, Kassim said floating solar shifts a larger share of project costs into balance-of-system and construction components.
“There are costs for floats, connectors, mooring systems, corrosion protection, and water-based installation. Dedicated substations and interconnection also add to costs, along with temporary works for access and safety,” he said, adding that several land-related expenses such as land acquisition fees, long-term leases, and heavy earthworks can be avoided through floating solar, closing the cost gap.
Floating solar delivers 5 to 15 per cent higher energy yield than conventional solar due to cooling effects, which can translate into faster returns, depending on site conditions and operational costs can also be managed effectively with good design and materials used upon construction.
Kassim pointed out that in cost terms, ground-mounted solar remains the cheapest per watt, while floating solar generally costs 5 to 20 per cent more due to higher capital expenditure.
Despite higher costs, scalability still remains a key strength. “Even with conservative coverage, large reservoirs can host hundreds of megawatts. Across Malaysia’s dams and mining ponds, total potential could easily reach one to two gigawatts,” he highlighted.
Although offshore floating solar is being explored in the country, both Kassim and Hamzah said inland water bodies remain the most commercially viable option for now, given offshore challenges such as waves, corrosion, and bankability.
“For now, inland water bodies remain the most attractive option. They offer scale and relative shelter, even though challenges such as deep-water anchoring still require advanced engineering solutions,” Kassim said.
