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Malaysia's land constraints for large-scale solar farms are prompting a shift towards floating photovoltaic (FPV) systems on reservoirs and mining ponds. Industry experts emphasize that FPV can unlock significant solar capacity without competing for land, aligning with the National Energy Transition Roadmap (NETR) that projects solar PV will account for 58% of the country's renewable energy mix by the 2030s, equating to 56 GW.

Tenaga Nasional Berhad plans to construct a 2.5 GW hybrid hydro-floating solar project. However, floating solar faces engineering challenges like grid integration and site access, as many water bodies lack proper infrastructure.

The Energy Commission has introduced quotas for floating solar in solar auctions, yet no formal guidelines are in place to promote its deployment. Despite higher initial costs compared to conventional solar, floating solar offers improved energy yields and scalability, with Malaysia having an estimated 16.6 GW of potential at existing reservoirs.