Malaysia’s renewable energy ambitions have received a significant boost under Budget 2026, with the Ministry of Energy Transition and Water Transformation (PETRA) allocated RM 5.19 billion; a 4.8% increase from the previous year. The new allocation underscores the government’s intent to strengthen the country’s clean-energy infrastructure while progressing toward the National Energy Transition Roadmap (NETR) target of 70% renewable energy capacity by 2050.

Major Allocations and Initiatives

Among the eight new projects and ongoing initiatives funded by the budget, several stand out as catalysts for Malaysia’s next stage of the clean-energy transition:

• Large-Scale Solar 6 (LSS6): Launching in 2026 with a total capacity of 2 gigawatts (GW), this phase is expected to attract RM 6 billion in private investment, further reinforcing Malaysia’s position as a regional leader in large-scale solar development.
• Green Infrastructure Investment: Government-linked companies (GLCs) and investment arms (GLICs) are collectively expected to contribute RM 16.5 billion toward renewable energy and electric-vehicle (EV) charging infrastructure.
• Solar ATAP & CRESS Expansion: The Solar Accelerated Transition Action Programme (Solar ATAP) enables households to lease rooftops for solar installations within a 5 km radius, potentially reducing electricity bills by up to 42%. Meanwhile, the Corporate Renewable Energy Supply Scheme (CRESS) is projected to draw up to RM 3.5 billion in private investment once fully operational.

Complementary Investments in Sustainability

The budget also outlines support for broader environmental and water initiatives that complement Malaysia’s decarbonisation efforts:

• RM 20 million in rebates for energy-efficient appliances and tax relief of up to RM 2,500 for food-waste reduction machines.
• RM 13 billion to upgrade national water treatment capacity under PAAB, and RM 3 billion to replace 820 km of aging water pipelines.
• RM 300 million for river rehabilitation and community recreation programmes.

Driving Momentum Under the NETR

Deputy Prime Minister YAB Datuk Amar Fadillah Yusof, who also helms PETRA, emphasized that Budget 2026 is designed for balanced implementation ensuring every ringgit contributes directly to the NETR’s three pillars: sustainability, energy security, and affordability.

“What matters most now is effective implementation, ensuring that every allocation is fully utilised and every project completed within scope, schedule, and budget,”— Datuk Amar Fadillah Yusof

The NETR’s second phase focuses heavily on execution, monitoring, and transparent reporting of renewable project outcomes across both public and private sectors. With the government encouraging public-private partnerships and structured investment mechanisms, the roadmap is no longer just about policy; it’s about performance. These measures aim to ensure that every kilowatt added to the grid contributes directly to Malaysia’s long-term goals of energy independence, grid reliability, and carbon neutrality by 2050.

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Conclusion
‍Budget 2026 marks more than just another fiscal allocation, it represents Malaysia’s accelerating commitment to building a cleaner, more resilient energy future. With billions earmarked for large-scale solar, rooftop programs, and private-sector participation, the country is transitioning from ambition to action. As renewable adoption scales and technology costs continue to fall, Malaysia’s journey toward 70% renewable capacity by 2050 becomes not only achievable but inevitable driven by innovation, collaboration, and a shared belief that sustainable energy is the foundation of sustainable growth.

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Sources:

• PETRA gets RM5.19b in Budget 2026 to drive green energy transition, water resilience
• Budget 2026 Energy Sector: Driving Malaysia's Energy Transition Agenda Towards a Sustainable Future
• Full Budget 2026 speech
• MPRC: Budget 2026 Reinforces Malaysia's Energy Transition Ambitions; Secures Value Creation for OGSE

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