Renewable Energy Sector Eyes Busy 1Q 2026 On Potential LSS6 Projects - Kenanga IB

KUALA LUMPUR, Jan 2 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) expects the first quarter of 2026 (1Q 2026) to usher in a busy period for the renewable energy sector, potentially marked by the rollout of solar bids under the Large-Scale Solar (LSS) 6 programme.

In a research note today, it said sentiment will ensure that LSS construction awards continue to have strong visibility, with LSS5+ projects moving into the construction awards phase as well. 

Additionally, Kenanga IB said details of the Solar Accelerated Transition Action Programme (Solar ATAP), which replaces the expired Net Energy Metering (NEM) 3.0 programme, were unveiled at year-end 2025.

“This, in our view, should start to reinvigorate adoption momentum in the retail space, given applications to commence from Jan 1, 2026,” it said.

Aside from solar, Kenanga IB noted that 1Q 2026 will witness bidding activity for the additional quota under the feed-in-tariff of 300 megawatt (MW), from February onwards.

It said the off-take of the Corporate Renewable Energy Scheme (CRESS) to lock in long-term energy at competitive rates would be a compelling proposition for data centres, which are typically ultra-high-voltage customers, with the committed value to CRESS so far reaching 1.3 gigawatt (GW) as of June 2025. 

“Execution remains key, and players that can scale quickly via partnerships and have a proven execution track record will be able to pull ahead.

“Corporates are locking in prices of solar panels to insulate margin pressure ahead,” it said.

Meanwhile, Kenanga IB said discussions on the climate change bill, which will clarify carbon tax implementation, are expected during the first parliamentary sitting of 2026 and could invigorate interest in this space.

“The renewable energy space is still in a fast-growth phase; therefore, Kenanga IB maintained its ‘overweight’ call on the sector,” it added.

-- BERNAMA