Investment Prospects for Solar Energy in Sudan and the Possibility of Benefiting from Malaysia’s Solar Energy Investment Model (Part 3 of 4)

Dr Ahmed Abdelbagi
A report issued by the clean energy think tank Ember projected that renewable energy would account for 52 per cent of Malaysia’s electricity mix—18 per cent below the national target—while gas would make up the remaining 48 per cent. However, such projections may leave Malaysia’s electricity sector, which currently depends on fossil fuels for around 80 per cent of generation, exposed to fluctuations in global fuel prices, as seen recently during the Iran–US conflict, as well as to the depletion of domestic reserves.
For this reason, the Malaysian Government may consider increasing its renewable energy ambitions in order to achieve a more diversified electricity mix. Malaysia has therefore adopted the National Energy Transition Roadmap, which aims to increase the share of renewable energy in the country’s electricity mix to 70 per cent by 2050.
In line with its national objectives, its commitment to reducing carbon dioxide emissions, and its pursuit of the Sustainable Development Goals, Malaysia has turned to investment in renewable energy in general and solar energy in particular. As a tropical country, Malaysia has substantial solar energy potential, making photovoltaic power a vital resource to meet electricity demand and support a more sustainable energy future.
Photovoltaic solar energy is expected to dominate the renewable energy mix, accounting for 58 per cent of the targeted total. Malaysia has therefore placed strong emphasis on solar energy investment, particularly through the Power Purchase Agreement (PPA) model.
So, what are Power Purchase Agreements?
Power Purchase Agreements are internationally recognised long-term contracts, often extending for 20 to 25 years, signed between a renewable energy system operator, developer, owner or investor—the seller—and an electricity purchaser—the buyer. These contracts define all commercial terms governing the delivery of energy generated from renewable sources, including price, quantity, contract duration, transfer of the facility at the end of the contract term, and other relevant conditions.
Under this model, the renewable energy investor, as the seller, is responsible for financing, maintenance and all services required to fulfil the contract, while the consumer, as the buyer, undertakes to pay for the agreed quantity of renewable energy.
Photovoltaic Solar Power Purchase Agreements in Malaysia
Malaysia has adopted and localised the PPA model in a manner suited to its national needs and investment environment. It has applied this model to photovoltaic solar energy, whose total installed capacity, according to statistics from the International Renewable Energy Agency (IRENA), reached 2,306 MW in 2024, compared with 2,146 MW in 2023.
The Malaysian model for investment in photovoltaic solar energy has taken four main forms.
1. Large-Scale Solar Photovoltaic Power Purchase Programmes for the National Grid
Under this model, the renewable energy authority, a government body, issues competitive tenders or auctions to companies known as Special Purpose Vehicles (SPVs), which act as sellers. These companies produce photovoltaic electricity under a quota system and supply Malaysia’s national electricity company, the buyer, with solar power ranging from 10 MW to 500 MW through long-term contracts lasting 21 years.
This investment model targeted the production of 2,000 MW of photovoltaic solar energy during 2024–2025, with purchase prices ranging between 13.75 and 18 Malaysian sen per kWh. The exchange rate is approximately USD 1 to MYR 4.13.
The programme included 13 projects, with a total value of around MYR 10 billion, equivalent to approximately USD 250 million.
Since these investments began in 2017, auction-based solar electricity prices have fallen by 64 per cent, from USD 0.082 per kWh to USD 0.029 per kWh. This decline is likely linked to the global reduction in solar generation costs, which fell by around 55 per cent, according to 2023 energy research reports.
At USD 0.029 per kWh, solar electricity in Malaysia is around 53 per cent cheaper than electricity generated from fossil fuels, which costs approximately USD 0.063 per kWh.
2. Solar PPAs for Companies, Commercial Institutions and Industrial Facilities
This investment model is designed to supply photovoltaic solar energy to large companies, commercial institutions and industrial facilities through two methods.
First, solar energy systems may be installed on the rooftops or on land owned by these institutions, supplying them directly with electricity. This arrangement also allows the buyer to sell surplus electricity to Malaysia’s national electricity company at an agreed price.
Second, the solar energy system may be installed at an off-site location, with electricity transmitted through the national grid in return for a transmission fee agreed between the national electricity company and the buyer.
This type of investment is supervised by three parties:
the Malaysian electricity company, which collects payments from the buyer and pays the seller;
photovoltaic solar power producers, as sellers, who are responsible for maintenance and supervision of solar assets throughout the 21-year contract period;
commercial and industrial companies and institutions, as buyers, which pay electricity tariffs to the Malaysian electricity company as stipulated in the contract.
3. Rooftop Solar on Residential Buildings
This model is divided into two categories.
The first involves commercial companies or investors, as sellers, supplying solar energy assets to building owners, including residential areas and small or medium-sized commercial premises, as buyers. This is done through a 21-year purchase agreement. The seller remains responsible for the supervision and maintenance of the assets, while the buyer pays for the electricity produced at a predetermined price agreed between the parties for the duration of the contract.
Under this model, the buyer may also sell surplus electricity to Malaysia’s national electricity company.
The second category allows owners of residential properties to lease their rooftops to a third party, usually investors, under a long-term contract. The investor installs solar equipment on the rooftop to produce photovoltaic solar power, which may then be sold, through contractual arrangements, to any buyer located within five kilometres of the installation site.
4. Ownership of Photovoltaic Solar Equipment Assets
Under this model, residential owners purchase and own the solar energy equipment themselves, similar to the arrangement currently seen in Sudan. The system typically costs between USD 3,500 and USD 10,500, financed either privately or through Malaysian banks.
The owner may choose to register with Malaysia’s electricity company to sell surplus electricity, or not. In the latter case, surplus energy is either wasted or stored in batteries.
Under this model, the cost can usually be recovered within five to ten years, depending on the quality of the solar equipment, with the system remaining usable for 15 to 20 years, depending on product quality and warranty terms.
To be continued…

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