Why Malaysia’s F&B manufacturers are racing to go solar

As electricity costs surge and sustainability becomes non-negotiable, renewable energy has shifted from a corporate responsibility initiative to a competitive necessity. 

Rising electricity tariffs have become a significant challenge for Malaysia’s food and beverage manufacturers, adding pressure to already tight operating margins. Recent data from the Federation of Malaysian Manufacturers reveals the scale of the challenge: 41% of manufacturers reported energy cost increases of up to 10% in 2023, while 36% grappled with similar pressures from raw material costs. For businesses operating on thin margins, these dual pressures are forcing a fundamental rethink of energy strategy.

Yet cost pressures tell only half a story. Environmental, social and governance has evolved from corporate nice-to-have to boardroom imperative. Global supply chains are realigning in response to climate commitments, and Malaysian manufacturers are discovering that sustainability credentials increasingly determine market access. Buyers want proof. Investors demand transparency. And the manufacturers who can’t demonstrate progress risk being left behind.

The convergence of these forces – rising costs and rising expectations, has triggered a quiet revolution across Malaysia’s industrial landscape. Solar energy, once viewed as an expensive environmental gesture, is rapidly becoming the pragmatic choice for manufacturers seeking to secure their competitive position.

From Theory to Practice

A trusted name in the beverage industry with over 50 years in the market, K.H.H. Double Lion Fruit Juice Manufacturing Sdn. Bhd., the maker of a variety of flavoured concentrates such as Ros Sirap, a drink many Malaysians are familiar with, is now showing what sustainability looks like on the factory floor. K.H.H Double Lion made the transition to solar power, partnering with renewable energy solutions provider EFS Group to install panels across its facility.

The results delivered both immediate and long-term value: stability in operating costs, crucial insulation against energy price volatility, and strengthened credentials with sustainability-conscious buyers.

“Energy costs were climbing every quarter, and at the same time, our buyers who value sustainability in their supply chain became more attentive to our carbon footprint and energy sources,” said Karin Tan, Director of K.H.H. Double Lion.

“We realised we were facing two problems that solar could solve at once: locking in predictable operating costs and proving that we’re serious about sustainability. For a business like ours, operating on tight margins in a competitive market, solar stopped being a ‘nice to have’ and became essential to staying in the game. Solar has helped us generate about 40% of electricity to help support our production floor.”

For EFS Group, K.H.H. Double Lion represents more than a successful installation, it exemplifies a fundamental shift in how manufacturers approach energy decisions. “What we’re seeing is a fundamental recalculation of what it means to be competitive,” said Darren Tan, CEO of EFS Group.

“Five years ago, manufacturers looked at solar as something you did to win CSR awards. Today, it’s about securing predictable energy costs, meeting buyer requirements, and future-proofing operations against an uncertain energy landscape.”

This evolution extends beyond individual companies. As renewable energy costs continue declining and policy support strengthens, early adopters are establishing themselves not merely as environmentally conscious, but as strategically positioned for a market that will increasingly penalize carbon-intensive operations.

When Policy Meets Urgency

The pressure facing individual businesses reflects Malaysia’s broader commitment to energy transformation. The National Energy Transition Roadmap, launched in 2023, charts an ambitious path forward: renewable energy capacity rising from approximately 25% today to 31% by 2025.

The roadmap identifies opportunities valued between RM 1.2 trillion and RM 1.3 trillion through 2050, with projections suggesting an additional RM 220 billion in GDP contribution and 310,000 green jobs.

To accelerate this transition, the government has moved beyond aspirational targets to concrete incentives. Beginning 1 December, the Solar Accelerated Transition Action Programme (Solar ATAP) replaces the previous Net Energy Metering scheme, retaining the core concept of selling excess energy back to the grid whilst incorporating adjustments designed to drive adoption.

The programme allows solar system installations of up to 100% of maximum demand, enabling users to optimise solar power for their own consumption, with offsets calculated at the system marginal price (SMP).

For existing NEM users whose offset periods have ended, options include switching to ongoing programmes like Solar for Self-Consumption (SelCo) or the Community Renewable Energy Aggregation Mechanism (CREAM), installing energy storage systems, or participating in future government solar initiatives.

These aren’t cosmetic adjustments. They represent a fundamental recalculation of how Malaysia positions itself in an increasingly carbon-conscious global economy.

The Competitive Imperative

The transformation happening across Malaysia’s food and beverage sector reflects a broader industrial awakening. Manufacturers are discovering that solar adoption isn’t about choosing between profit and planet, it’s about recognising that the two have become inseparable. Energy stability protects margins. Sustainability credentials unlock markets. Reduced carbon footprint satisfies investors and regulators alike.

For companies like K.H.H. Double Lion, the decision to transition demonstrates that this shift is achievable even for legacy manufacturers. It requires neither massive facilities nor cutting-edge processes, just recognition that in Malaysia’s evolving industrial landscape, renewable energy has become as essential as reliable supply chains and skilled workers.

Malaysia’s target of increasing renewable energy to 40% of the power mix by 2035 creates both opportunity and urgency. For food and beverage manufacturers, the question is no longer whether to embrace solar energy, but how quickly they can make the transition while maintaining operational efficiency.

Companies that move decisively by securing favourable financing, partnering with experienced implementation partners, and integrating renewable energy into long-term operational planning position themselves to thrive as regulatory requirements tighten and buyer expectations evolve.

Those that delay risk finding themselves at a disadvantage in markets where sustainability credentials have become table stakes. The manufacturers leading this transition today aren’t just adapting to change, they’re defining the competitive standards of tomorrow’s industrial landscape.

-ASEAN FOOD & TRVEL