Malaysia Solar Thermal System Market Size, Share, Trends and Forecasts 2031

Key Findings

• The Malaysia Solar Thermal System Market is expanding rapidly due to rising demand for clean heating technologies.

• Solar thermal systems in Malaysia are increasingly used for residential, commercial, and industrial heating applications.

• Supportive government incentives and renewable energy targets are accelerating installations across the region.

• Technological advancements in collectors and storage systems are improving efficiency and lowering unit costs.

• Industrial process heat applications in Malaysia are emerging as a significant growth segment.

• Growing consumer awareness of energy savings is boosting solar water heater adoption.

• Hybrid solar thermal systems are gaining traction for high-efficiency performance.

• Expanding solar infrastructure in Malaysia is supporting broader renewable energy transitions.

Malaysia Solar Thermal System Market Size and Forecast

The Malaysia Solar Thermal System Market is projected to grow from USD 5.6 billion in 2025 to USD 11.9 billion by 2031, at a CAGR of 13.2%. Growth is driven by increasing demand for sustainable heating systems, rising energy costs, and supportive policy frameworks in Malaysia. Expansions in solar collector technology, heat transfer fluids, and thermal storage solutions are contributing to wider adoption. Industrial, residential, and commercial end-users are adopting solar thermal technologies to reduce operational expenses and carbon emissions. As Malaysia accelerates its transition toward renewable energy, solar thermal systems will play a critical role in meeting thermal energy needs.

Introduction

Solar thermal systems use sunlight to generate heat, which can be utilized for water heating, space heating, and industrial process heat. In Malaysia, these systems are becoming essential for energy diversification and carbon reduction strategies. They rely on solar collectors, insulated piping, heat exchangers, and storage tanks to deliver efficient thermal energy. With advancements in selective coatings and collector design, efficiency levels continue to rise. The increasing focus on sustainability in Malaysia is encouraging both households and industries to adopt solar thermal technologies.

Future Outlook

By 2031, solar thermal systems in Malaysia are expected to be mainstream heat sources integrated into residential complexes, commercial buildings, and industrial facilities. Innovations in high-temperature thermal storage and concentrator technologies will expand their application potential. As energy policies tighten and fossil fuel costs rise, solar heating solutions will gain further momentum. Hybrid systems combining solar thermal with heat pumps or photovoltaics will dominate the landscape. Overall, solar thermal will remain a key component of clean energy strategies in Malaysia.

Malaysia Solar Thermal System Market Trends

• Growing Adoption of Solar Water Heating Systems
  Solar water heating systems are becoming one of the most widely deployed solar thermal applications across Malaysia. Homeowners and commercial users are opting for these systems due to their ability to reduce electricity consumption and provide consistent hot water supply. Manufacturers are introducing compact, lightweight, and more durable designs, making installation easier and faster. Demand is also driven by growing awareness of long-term cost savings and environmental benefits. This trend is expected to intensify as utility costs rise and consumers prioritize energy-efficient solutions.

• Advancements in Collector Technologies
  Improved collector technologies such as evacuated tube collectors and parabolic trough collectors are significantly enhancing thermal efficiency. Research institutions and manufacturers in Malaysia are investing in coatings and materials that maximize heat absorption while minimizing losses. These advancements are making solar thermal systems more viable for high-temperature industrial applications. Additionally, emerging flat-plate collectors with advanced insulation are gaining traction. As technologies continue to evolve, efficiency gains are expanding the potential use cases for solar thermal systems.

• Rising Adoption of Solar District Heating
  Solar district heating systems are gaining momentum in Malaysia as urban planners seek to reduce carbon emissions from large-scale heating networks. These systems use centralized solar thermal plants to provide heat to residential and commercial buildings. The approach offers economies of scale and improves overall energy efficiency. Governments are supporting district heating expansion through incentives and pilot projects. This trend highlights the shift toward large-scale renewable heating solutions in densely populated areas.

• Integration of Hybrid Solar Thermal Solutions
  Hybrid systems that combine solar thermal technologies with heat pumps or photovoltaic systems are becoming increasingly popular in Malaysia. These setups offer higher efficiency and improved reliability by leveraging multiple renewable sources. They also enable optimized energy utilization during periods of low solar radiation. Manufacturers are designing integrated solutions that are easy to install and maintain. This trend reflects the industry’s move toward versatile and resilient energy systems.

• Increasing Use of Solar Thermal for Industrial Process Heat
  Industrial sectors in Malaysia are adopting solar thermal systems to reduce their reliance on fossil fuels for process heat. Industries such as food processing, textiles, chemicals, and pharmaceuticals are incorporating solar heating to lower operational costs. Solar concentrator technologies are making it possible to reach required temperature levels for various applications. Companies are also adopting solar heat to meet sustainability commitments and reduce emissions. This trend highlights the growing relevance of solar thermal in industrial decarbonization.

Market Growth Drivers

• Rising Energy Costs and Need for Cost-Effective Heating
  Increasing electricity and fossil fuel prices in Malaysia are motivating consumers and industries to adopt solar thermal solutions. Solar thermal systems offer a reliable and cost-effective alternative for water and space heating needs. Their ability to reduce monthly energy bills makes them highly attractive to users seeking long-term savings. The systems also provide stable performance with low maintenance requirements. This driver is contributing significantly to the expansion of the market.

• Strong Government Incentives and Supportive Policies
  Policymakers in Malaysia are offering tax credits, subsidies, and rebates to encourage solar thermal adoption. National energy sustainability goals are motivating governments to promote renewable heating technologies. Public awareness campaigns and demonstration projects are further accelerating installations. Supportive regulations around building energy efficiency are also driving adoption. This growth driver underscores the importance of policy support in boosting market penetration.

• Growing Demand for Renewable Heating Solutions
  As environmental concerns rise, consumers and industries in Malaysia are increasingly shifting toward renewable heating sources. Solar thermal systems are seen as an effective option for reducing carbon emissions and dependency on fossil fuels. Their ability to provide clean heating throughout the year without harmful byproducts is appealing to environmentally conscious users. The growing emphasis on green buildings is further encouraging adoption. This driver reflects the global movement toward sustainable energy systems.

• Increasing Industrial Adoption for Process Heating
  Many industries require substantial heat for processing materials, cleaning, and manufacturing. Solar thermal systems are being integrated into these processes to reduce energy-related expenses. Their ability to provide medium- to high-temperature heat makes them suitable for various applications. Industries in Malaysia are adopting solar thermal systems to meet emission reduction targets and reduce fuel consumption. This growth driver is expanding the market’s industrial footprint.

• Advancements in Technology Improving System Efficiency
  Ongoing research and innovation are resulting in more efficient collectors, heat exchangers, and thermal storage systems. These advancements are reducing losses and increasing the overall performance of solar thermal systems. As a result, the systems now require smaller installation areas while producing higher heat output. Improved design and automation features are enhancing reliability and convenience for end-users. This growth driver highlights the impact of technology on market expansion.

Challenges in the Market

• High Initial Cost of Solar Thermal Installations
  Despite long-term savings, the upfront cost of purchasing and installing solar thermal systems remains a major barrier in Malaysia. High-quality collectors, thermal storage systems, and installation labor can significantly increase the cost. Many consumers are hesitant to invest without strong subsidies or financing options. This challenge slows down adoption, especially in price-sensitive regions. Overcoming cost-related barriers is essential for broader market growth.

• Limited Awareness and Misconceptions Among Consumers
  Some consumers in Malaysia still lack awareness about the benefits and performance of solar thermal systems. Misconceptions regarding system efficiency during cloudy conditions or winter hinder adoption. Lack of understanding about long-term cost savings reduces interest in solar heating technologies. Public education campaigns are essential to enhance market acceptance. This challenge highlights the need for more comprehensive outreach efforts.

• Space Constraints for Installation in Urban Areas
  Solar thermal systems require adequate rooftop or ground space to install collectors. In densely populated urban areas of Malaysia, limited space makes installations challenging. Competing demands for rooftop space, such as solar PV systems, also affect decision-making. Small households or commercial buildings may struggle to accommodate system requirements. This challenge impacts market potential in high-density regions.

• Seasonal Variability Affecting Performance
  Solar thermal system performance is influenced by weather patterns and seasonal changes. In regions with extended winters or heavy cloud cover, heat output may vary significantly. Consumers often require backup systems to maintain heating continuity. This variability raises concerns about reliability and cost-effectiveness. Addressing seasonal performance challenges is key to improving user confidence.

• Complex Installation and Maintenance Requirements
  Installing solar thermal systems requires skilled technicians and careful planning to ensure optimal performance. Incorrect installation can lead to heat losses, inefficiencies, or system failures. Maintenance tasks such as cleaning collectors and checking fluid levels add to operational challenges. In regions where skilled labor is scarce, this becomes a significant barrier. This challenge highlights the importance of training and technical support infrastructure.

Malaysia Solar Thermal System Market Segmentation

By System Type

• Active Solar Thermal Systems

• Passive Solar Thermal Systems

By Collector Type

• Flat Plate Collectors

• Evacuated Tube Collectors

• Unglazed Collectors

• Parabolic Trough Collectors

By Application

• Residential

• Commercial

• Industrial

By Heat Capacity

• Low-Temperature Systems

• Medium-Temperature Systems

• High-Temperature Systems

Leading Key Players

• Bosch Thermotechnik GmbH

• Viessmann Group

• Rheem Manufacturing Company

• A.O. Smith Corporation

• SunMaxx Solar

• Apricus Solar Co. Ltd.

• Heliodyne Inc.

• Linuo Paradigma Co. Ltd.

• Solahart Industries

• SunEarth Inc.

Recent Developments

• Bosch launched a high-efficiency evacuated tube system tailored for Malaysia climates.

• Viessmann partnered with commercial developers in Malaysia to deploy large-scale solar thermal plants.

• Rheem introduced an integrated solar water heating system optimized for local energy policies in Malaysia.

• Apricus expanded its manufacturing capacity to support rising demand in Malaysia.

• SunEarth unveiled advanced flat-plate collectors with improved thermal performance for Malaysia markets.

This Market Report Will Answer the Following Questions

1. What is the projected size of the Malaysia Solar Thermal System Market by 2031?

2. What technologies are driving efficiency improvements in solar thermal systems?

3. Which sectors are expected to adopt solar thermal systems the fastest?

4. What are the major challenges limiting widespread adoption in Malaysia?

5. Who are the key players shaping the future of the solar thermal industry?