KUCHING: Malaysia’s solar industry could emerge stronger from global trade shifts, thanks to lower tariff exposure and robust downstream capabilities, according to the Malaysian Photovoltaic and Sustainable Energy Association (MPSEA).
The association noted that Malaysia’s solar panel manufacturing facilities, including those in Sarawak, are primarily export-oriented, focusing on markets such as the United States (US) and the European Union.
“While the new tariffs may affect exports to the US, the direct impact on Malaysian manufacturers is expected to be limited, given that Malaysia faces relatively lower tariff rates compared to other Southeast Asian nations.
“Additionally, exports to the US had already declined in anticipation of such trade measures.
“As tariffs on neighbouring countries increase, Malaysia could see a stabilisation or even an improvement in export volumes,” it told Sarawak Tribune.
It also noted that solar manufacturers in Malaysia, including in Sarawak, had already begun scaling back operations before the recent tariff announcements, indicating that the move may have a minimal new effect on operations.
Domestically, the association pointed out that the solar installation market remains heavily dependent on Chinese imports.
“Chinese manufacturers lead in production capacity, cost efficiency, and technological advancement, making them the dominant suppliers for the local market,” it said.
In light of shifting supply dynamics, it stated that Malaysia continues to attract Chinese solar firms looking to diversify their operations.
“Malaysia’s friendly business environment continues to attract Chinese manufacturers seeking to diversify their operations.
“Leading players such as Jinko, JA Solar, and Longi have already established a presence here, along with segments of their supply chains,” it added.
MPSEA also highlighted that Malaysia currently lacks local solar module manufacturing capacity, with the industry primarily focused on downstream services such as installation, engineering and maintenance.
Nonetheless, it sees this service-oriented structure as a strength and a growth opportunity.
“The strength of Malaysia’s solar sector lies in its service capabilities, which are supported by stable local policies and regulatory frameworks.
“These conditions help create a sustainable business environment for our members.
“While global trade tensions may affect upstream manufacturing, the impact on Malaysia’s solar services segment is relatively limited,” it said.
To help industry players adapt, the assocation is actively supporting its members through ongoing policy advocacy, strategic stakeholder engagement and the sharing of relevant market intelligence.
“We work closely with government agencies and industry players to ensure that policy and regulatory frameworks remain stable, transparent and conducive to long-term business growth.
“Our goal is to minimise risk and uncertainty for our members while fostering a resilient and competitive solar industry in Malaysia,” it said.
The association added that Malaysia’s solar industry supply chain remains largely North Asia-centric, with minimal reliance on the US and Europe.
“The direct impact of recent tariffs on the broader Malaysian solar industry is limited beyond the potential loss of certain module manufacturing operations.
“However, this shift presents an opportunity for the sector to pivot and explore new directions particularly by leveraging the skilled workforce and industry expertise that have been cultivated over the years,” it said.
