Financing and Policy Challenges of the Renewable Energy Industry in Malaysia: A Review

Abstract

The renewable energy (RE) sector in Malaysia has developed rapidly with the implementation of government policies, such as the  National Energy Transition Roadmap (NETR) and the Malaysia Renewable Energy Roadmap (MyRER). This study is based entirely on  data sources from the literature review and policy. Approximately 45 sources were identified, reviewed, and assessed systematically  between 2010 and 2025. The overall challenges in the renewable energy sector are addressed in this article through the financial, policy,  and infrastructural barriers that confine large-scale uptake. A critical examination of recent studies and official reports is conducted to  identify long-standing impediments and assess the effectiveness of national policies in realising Malaysia’s renewable energy objectives.  The identified impediments include high initial investment demands, an uncertain policy regime, limited institutional support, and  financing challenges, which are among the major constraints to sector development. The study further emphasises the role of government  intervention, private investment, and public–private partnership in the successful execution of RE projects. With Malaysia aiming for 70%  renewable capacity by 2050, the industry still faces macroeconomic headwinds, including volatile exchange rates, rising interest rates,  and inflationary pressures. The research contributes to the field of knowledge by offering insights into the renewable energy challenges  of Malaysia and providing concrete recommendations for enhancing policy environments, improving access to funding, and promoting  inter-stakeholder coordination.