Faced with an urgent need to move towards clean energy, Southeast Asia is emerging as a unique front-runner in floating solar power. Thanks to its abundant water resources, progressive policy and strategic geographical conditions, the region is set to become a worldwide hub for floating solar by 2030.

Floating photovoltaic (PV) technology has experienced an explosion in popularity recently, with global capacity increasing from a mere 70 MWp in 2015 to a whopping 1,300 MWp by 2020. Industry forecasts indicate even greater expansion by another 43% year-on-year over the next decade, with the global floating solar market predicted to reach USD 196.49 Billion by 2031 – an exponential jump from its USD 38.50 billion valuation in 2023.

For Southeast Asia, a region characterised by rapid economic development, growing energy demands, and in many cases, often limited land availability, floating solar presents an exceptionally appealing solution. It offers a way to generate clean energy without consuming valuable terrestrial space, while providing additional benefits such as reduced water evaporation from reservoirs and higher production efficiencies in solar panels due to the cooling effect of water.  With its advantages, floating solar is emerging as a key element in the region’s clean energy strategy.

How do floating solar panels work?

Floating solar panels employ the same technology as traditional solar panels, converting sunlight to electricity via photovoltaic cells – the key difference is that these systems live on large bodies of water such as lakes, reservoirs, and coastal marine areas. Polyethylene floats keep the panels stable, above water and oriented towards the sun.

One of the primary benefits of FPV systems is their better power output efficiency compared to land-based solar installations. This enhanced efficiency is attributed to the cooling impact of the surrounding water. As solar panels heat up, their efficiency wanes and water serve as a cooling mechanism allowing them to maintain optimal operating temperatures thus generating more electricity for a longer time. Some studies suggest this could improve efficiency by 11% compared to land-based panels.

While most of the world is well acquainted with the benefits of solar power, FPV systems have proven to be additionally advantageous by delivering the added benefits of enabling water conservation. By covering a portion of the water surface, these systems reduce the rate evaporation of that water, a much welcome side effect in regions that are plagued by water scarcity, as it helps conserve valuable resources. Floating solar panels on places like the surface of hydroelectric dams conserves water that can be used for hydropower whilst those on the surface on lakes and ponds help conserve water for farmland irrigation.

FPV technology’s most compelling aspect may be its ability to make alternative energy that does not have to consume valuable land resources, which means it can produce clean power without interfering with agriculture or housing of natural habitats. This is an especially a helpful feature for land-strapped Southeast Asian nations, where competition for land can be intense.

Leading the Charge

The Southeast Asian region is also one of the fastest-growing economies in the world with its combined GDP of more than USD 3 trillion – which inadvertently creates an ever-increasing demand for energy. As such, ASEAN and its member states have started to explore ways in which they can scale up the use of renewable energy, setting a collective renewable energy capacity target of 35% by 2025.

Malaysia has been at the forefront of floating solar adoption in the region, with Tenaga Nasional Berhad (TNB), the country’s main utility provider, playing a key role in this transition.

“Floating solar aligns with sustainable energy development principles, mitigates climate change by reducing greenhouse gas emissions, and brings economic benefits to the local communities through job creation and investment,” said TNB as it announced its support for the country’s efforts. “Overall, it presents a harmonious integration of renewable energy generation with environmental conservation.”

“These systems have no water or air discharges that may degrade environmental quality, as opposed to conventional thermal plants. When paired with other renewable sources, they significantly boost our ability to transition power supplies onto a cleaner, greener footing,” continued TNB, emphasizing floating solar’s role in advancing Malaysia’s energy transition goals.

The recently unveiled TCS Floating Large-Scale Solar Photovoltaic (LSSPV), built on Sungai Rawang – Serendah Lake in the nation’s capital, is expected to supply Tenaga National Berhad with 1,043,114 MWh of environmentally friendly energy over a 25-year power purchase agreement (PPA). This floating solar plant is part of the nation’s National Energy Transition Roadmap (NETR) launched in July 2023.

Thailand has also emerged as a pioneer in the region demonstrating its commitment towards innovative renewable energy solutions by intelligently pairing solar and hydropower generation. Its 45 megawatt (MW) floating solar installation at Sirindhorn Dam, has been lauded as the “world’s largest floating hydro-solar farm”. The Sirindhorn dam works around the clock generating solar power by day and hydropower by night. The 720,000 sqm facility is the first of 15 farms in the nation’s pipeline as part of its journey towards carbon neutrality by 2050.

Land-scarce Singapore, on the other hand, has taken on the challenge of land constraints head-on to become prime developers of offshore floating solar modules. With no possibility of land-based solar farms, the island nation is installing hybrid offshore-floating solar systems in straits and reservoirs near its coastline. The 2 MW Tuas South floating solar project, deployed in 2018, was crucial is demonstrating the technical feasibility of constructing and maintaining floating solar arrays offshore; spurring the nation’s ambitious targets of at least 2 GW of floating solar capacity by 2030 through larger offshore projects, driving technical advancements beneficial for the wider region.

Indonesia is aiming to set a record of the largest FPV complex globally at 2.2 GW when they complete the Duriangkang FPV, whilst Vietnam aims to install ten (10) gigawatts of floating solar power between now and 2030 to address increasing energy demands.

Overcoming Challenges and Accelerating Growth

While FPV systems offer enormous promise, the sector is not without its challenges. Issues related to product durability, system stability, water quality impacts, and grid integration have been significant hurdles.

The damage on the world’s largest floating solar plant at Omkareshwar dam in India’s during a 2024 storm has highlighted the need to address the potential risks and environmental consequences of these systems. Engineering and design standards that can withstand the increasingly extreme weather patterns driven by climate change are much needed.

The introduction of massive structures into water bodies, such as floating solar panels may also impact local aquatic ecosystems. Aquatic life caught under the shade of solar panels may experience a disruption of biological processes such as photosynthesis in aquatic plants, which may inadvertently result in negative consequences for water quality and aquatic life.

To maximise the potential floating solar power, academia and industry must forge research partnerships to address environmental impacts, refine designs and enhance energy efficiency.

Strategic alliances between public and private sectors are also needed to share risks and pilot new technologies. Government policies, such as feed-in tariffs and tax incentives, can also be implemented to support floating solar growth. For example, Malaysia offers substantial tax incentives, such as Capital Allowance (CA) and Green Investment Tax Allowance (GITA), which can cover up to 48% of the investment cost for companies installing solar systems, while Vietnam has introduced specific guidelines for floating solar projects, providing clarity for investors and developers.

The Need for Systemic Regional Cooperation

Despite the promising outlook, the widespread adoption of floating solar in Southeast Asia faces challenges that extend beyond technology. As the region faces exponential energy demand growth, ensuring supply security becomes paramount. A key challenge lies in building the necessary infrastructure and establishing common energy market frameworks. This necessitates not just the development of floating solar capacity, but also the creation of smart grids and energy storage solutions that can effectively integrate this new power source.

An interconnected ASEAN grid would facilitate efficient energy distribution, improve supply security, and support the integration of renewable energy sources. However, the region’s energy landscape is fragmented, with each country having its own policies, regulations, and market structures. Harmonizing these disparate systems is crucial for the creation of a robust, interconnected floating solar and clean energy sector across Southeast Asia.

Singapore-based analyst from BloombergNEF Caroline Chua highlights this challenge, “Many are seeking cleaner alternatives to coal-fired generation as they look to meet this rising need for electricity,” she said. However, she emphasised the complexity of Southeast Asia’s energy landscape compared to more integrated regions like Europe. “Harmonising policies, regulationsd cross-border market operations will be crucial if the goal is to connect ASEAN’s grids,” she explained.

By combining financial support, knowledge sharing, local empowerment, and targeted skill development, this comprehensive strategy can help overcome disparities and foster a more integrated and sustainable floating solar sector across the diverse Southeast Asian region.

A Floating Future for Southeast Asia

Undoubtedly, the Southeast Asian region is poised to be pioneer and key contributor to the floating solar industry over the coming years. The unique advantages offered by floating solar – from land conservation to enhanced energy production efficiency – make it an ideal solution for meeting the region’s growing energy demands alongside other renewable sources.

As countries across Southeast Asia continue to invest in and expand their floating solar capabilities, they are not only addressing their immediate energy needs but also contributing significantly to global efforts in combating climate change. The floating solar revolution in Southeast Asia serves as a powerful example of how innovative technologies, coupled with decisive policy action and regional cooperation, can drive meaningful transition.