PENANG must accelerate its transition to clean energy as global companies increasingly weigh renewable power access when deciding where to invest, says Chief Minister Chow Kon Yeow.
He said clean energy was no longer just an environmental concern, but a key factor in keeping Penang competitive in the semiconductor and electrical and electronics (E&E) sectors.
“Companies still look at talent, infrastructure, logistics and cost.
“But increasingly, they are asking, where does your electricity come from?
“If Penang cannot provide clean energy, other locations will,” he said at the “R.A.C.E to Zero: Penang Edition”.
Penang recorded RM436.9bil in E&E exports last year, accounting for about 68% of Malaysia’s total E&E exports, but manufacturers now faced growing pressure from global customers to reduce carbon emissions across their supply chains, he said.
Under the Penang Energy Framework launched in November 2024, the state aims to cut energy intensity by 25% and raise renewable energy’s share in its mix to at least 10% by 2030.
Chow said rooftop solar remained one of the most practical options for the land-scarce state.
Under new guidelines, new commercial and industrial buildings are expected to use at least 75% of their roof area for solar panels or meet the relevant renewable energy targets based on their electricity tariff category.
The state is also studying floating solar arrays on its dams, while the Silicon Island project will include a solar-supported Green Tech Park.
Chow said the state was introducing energy intensity standards to help businesses measure and reduce energy use.
State government and local authority buildings are also being assessed for their potential to use renewable energy and improve efficiency.
For eligible new government and local authority buildings, at least 5% of total energy consumption is targeted to come from renewable sources, while existing facilities are encouraged to work towards the same target.
Chow said Penang’s efforts aligned with the Federal Government’s National Energy Efficiency Action Plan (NEEAP) 2.0, which targets an 11.6% reduction in national energy demand by 2035.
“Energy efficiency reduces costs, improves productivity, strengthens energy security and reduces pressure on the grid,” he said.
He added that the transition would require investment from businesses, including in new equipment, solar systems and energy-saving measures.
On the RM20mil Climate Mitigation Fund, Chow said 25 eligible companies were currently undergoing assessment for funding to implement climate- related measures at their manufacturing facilities.
The fund, established in collaboration with Alliance Bank, comprises RM5mil from the state government and RM15mil from the bank.
Chow also noted the uncertainty facing the global solar industry following new US tariffs and trade measures on solar-related products.
He said Malaysia needed to strengthen domestic demand for renewable energy, diversify its markets and build a more resilient clean energy supply chain.
“For Penang, this reinforces the importance of our own energy transition.
“We should not depend entirely on external markets or imported energy solutions,” he said.
Chow said the state should instead build local capability, create demand and strengthen its clean energy ecosystem.
“There will be costs in this transition. But there will be a bigger cost if we do nothing,” he added.
