KUALA LUMPUR: The domestic solar market in Malaysia is evolving beyond standalone rooftop installations towards integrated solar-plus-storage systems, as grid constraints and regulatory shifts reshape demand.
Riding this transition, Northern Solar Holdings Bhd is positioning itself at the forefront by building expertise in solar battery energy storage system (BESS) solutions, which it views as a critical differentiator as mandatory BESS requirements come into force this year.
“At the same time, we are expanding into utility-scale and larger projects.
“Rather than pivoting away from our core strengths, we continue to prioritise commercial and industrial (C&I) and residential projects, while using partnerships for larger utility projects where scale and risk-sharing matter.
“This allows us to participate in higher-value segments without diluting margins or overstretching resources,” Northern Solar group managing director Lew Shoong Kai told SunBiz.
He explained the new guidelines under the Solar Energy Self-Consumption (SelCo) Programme that took effect this month, which require BESS for grid-connected solar installations above 72kWp to improve grid stability.
Elaborating on how the BESS mandate and the enhanced SelCo frameworks drive demand, Lew said the mandatory requirement for BESS for non-domestic solar installations above 1MWac from Jan 1 2026 materially changes the market.
“Projects will no longer be evaluated on solar generation alone, but on system reliability, storage integration and lifecycle performance.
“This raises the technical bar and favours engineering, procurement, construction and commissioning (EPCC) players with integrated design and execution capability,” he said.
Lew noted that the enhanced SelCo frameworks – allowing ground-mounted systems and installations up to 100% of demand – expand the addressable market, particularly for farms, factories and energy-intensive users.
“Northern Solar has already delivered solar-plus-storage projects, which positions us well to capture this next wave of demand as customers move from basic rooftop solutions to more sophisticated energy systems,” he said.
Further, Lew said ground-mounted SelCo projects integrated with BESS represent a new and expanding sub-segment within the self-consumption market.
He said projects such as the RM20.5 million contract with FDIGS Makmur Sdn Bhd demonstrate that customers with land availability and high, stable energy demand are increasingly looking beyond rooftops to optimise their energy costs and resilience.
To note, Northern Solar secured an EPCC contract with FDIGS Makmur, a Pahang-based sustainable aquaculture company, in September last year. The contract is for the development of a 5MW ground-mounted Selco system integrated with a 10MWh BESS in Pahang.
The project is expected to generate 6.68 million kWh of clean electricity annually, enabling FDIGS Makmur to achieve estimated savings of RM3.93 million per year while reducing reliance on conventional grid power.
“As enhanced SelCo guidelines allow installations up to 100% of demand, we expect more projects of a similar scale to emerge in 2026,“ Lew said.
From an order book perspective, he added, these projects are typically larger-ticket than traditional rooftop installations and often require storage integration, which increases overall contract value.
Lew said this not only supports order book growth but also improves project quality, as customers tend to commit with clearer economics and longer-term energy planning.
When asked about policy risks, such as delays in LSS (large-scale solar) project rollouts or changes to tax incentives and enhanced energy efficiency (EEI) benefits, which could impact Northern Solar’s project pipeline and margins, Lew said that, similar to any policy-driven sector, timing and regulatory clarity are key risks.
Delays in LSS rollouts or adjustments to programme parameters could shift project award timelines, while changes to tax incentives, such as the Green Investment Tax Allowance, Green Income Tax Exemption or EEI may affect customer economics and decision-making.
“That said, Malaysia’s overall commitment to renewable energy under the National Energy Transition Roadmap remains intact.
“Northern Solar mitigates these risks through diversification across segments. Our core C&I and residential projects have shorter execution cycles and greater pricing flexibility than utility-scale projects. We also adopt a selective approach to LSS participation and avoid over-reliance on any single scheme, which helps preserve margins and execution certainty even if policy timelines shift,” Lew said.
Explaining the steps Northern Solar is taking post-listing to scale for the RM15–18 billion solar supercycle through 2029 while maintaining healthy gross margins, Lee said the focus has been on strengthening the fundamentals needed to scale responsibly.
This includes maintaining a clean balance sheet, disciplined capital allocation and investing in execution capabilities rather than chasing headline capacity.
“We have expanded our workforce selectively, strengthened procurement planning, and built partnerships to support larger projects without overstretching internal resources.
“Equally important is margin discipline. We prioritise C&I and residential projects where pricing flexibility is stronger, and we approach utility-scale opportunities selectively, often via joint ventures to manage risk.
“Combined with early preparation in solar-plus-storage solutions, this allows Northern Solar to participate in the solar supercycle while protecting gross margins and long-term returns,” Lew said.
