The Top Challenges to Implementing Energy Efficiency in Malaysia
Reading Time: 9 minutes
Key Takeaway: Energy efficiency in Malaysia isn’t just about technology—it’s about overcoming barriers in awareness, policy, financing, and commitment.
Introduction (PAS Framework)
Problem:
Many Malaysian businesses agree that saving energy saves money—but few are taking real action. Despite rising energy costs and climate pressures, energy efficiency (EE) projects often remain on paper, not in practice.
Agitation:
Why? Because companies face real obstacles—limited expertise, lack of incentives, and sometimes, simple confusion about where to start. These roadblocks slow progress and cost organisations thousands in wasted energy every year.
Solution:
In this article, “The Top Challenges to Implementing Energy Efficiency in Malaysia,” we’ll break down these barriers and show what’s really holding industries back—and how your business can overcome them.
Summary Box
✅ Article: The Top Challenges to Implementing Energy Efficiency in Malaysia
✅ Focus: Why many Malaysian organisations struggle to achieve energy efficiency
✅ Learn: The key technical, financial, and organisational barriers—and how to overcome them
✅ Best for: Facility managers, energy officers, and business owners who want real results
The Top Challenges to Implementing Energy Efficiency in Malaysia
Energy efficiency is one of the fastest, cheapest, and cleanest ways to cut costs and carbon emissions. Yet, in Malaysia, adoption remains slower than expected. Many organisations know the benefits, but few have a solid plan or resources to execute them effectively.
Let’s explore The Top Challenges to Implementing Energy Efficiency in Malaysia—and what you can do about each one.
1. Limited Awareness and Understanding
One of the biggest obstacles is simple: many people still don’t understand what energy efficiency truly means.
While some believe it’s just about switching off lights, the reality goes much deeper—covering system optimisation, monitoring, and behavioural change.
Why it’s a challenge:
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Many businesses view EE as a “technical” issue rather than a strategic investment.
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Misunderstanding between energy saving and renewable energy leads to confusion.
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Decision-makers often underestimate the payback potential of energy projects.
How to overcome it:
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Conduct awareness sessions across all levels of your organisation.
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Share case studies of local companies that saved costs through EE initiatives.
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Use energy audits to visualise waste and potential savings.
2. Financial Constraints and Perceived High Costs
The misconception: energy efficiency projects are expensive.
The truth: most projects pay for themselves within 2–4 years.
Still, this misconception stops many organisations from starting.
Common financial barriers include:
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Limited access to financing options for EE upgrades.
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High upfront cost perception, even when long-term savings are clear.
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Energy-saving benefits often overlooked in financial planning.
Solutions:
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Look for Energy Performance Contracting (EPC) models, where savings fund upgrades.
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Tap into government incentives like the Green Investment Tax Allowance (GITA).
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Consider energy service companies (ESCOs) to implement no-upfront-cost projects.
3. Lack of Skilled Personnel and Expertise
Energy management is a specialised field—and Malaysia still faces a shortage of certified professionals.
Challenges include:
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Few trained energy managers at plant or building level.
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Lack of internal teams to monitor and sustain energy-saving measures.
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Overreliance on external consultants without internal capability building.
How to address it:
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Invest in training your staff through SEDA or Energy Commission programs.
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Hire or appoint a Registered Electrical Energy Manager (REEM).
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Build internal capacity by integrating EE into job roles and KPIs.
4. Insufficient Data and Energy Monitoring
You can’t manage what you don’t measure. Unfortunately, many companies in Malaysia don’t track their energy use effectively.
Why it’s a problem:
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Without data, it’s impossible to identify energy waste.
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Inefficient systems go unnoticed until bills skyrocket.
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Lack of benchmarking prevents improvement tracking.
Steps to fix this:
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Install smart meters and submetering for key systems.
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Use Energy Management Systems (EnMS) aligned with ISO 50001.
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Set baselines and targets for continuous monitoring.
5. Weak Policy Enforcement and Incentives
Malaysia has strong energy-related policies, but enforcement and motivation remain inconsistent.
Key issues:
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Many companies see EE compliance as optional.
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Limited audits or penalties for non-compliance.
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Incentive programs often underpromoted or complicated to access.
How to strengthen impact:
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Simplify incentive applications through clearer guidelines.
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Increase collaboration between government and private sectors.
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Promote recognition programs for energy-efficient companies.
6. Organisational Resistance to Change
Even when solutions are clear, people resist change—especially if they don’t see immediate benefits.
Common symptoms:
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Staff reluctant to adopt new procedures or monitoring systems.
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Management sees EE as a cost centre, not a value driver.
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Energy-saving habits fade after short campaigns.
How to overcome it:
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Build a culture of energy awareness—not just one-time training.
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Celebrate small wins and share measurable results.
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Align EE goals with corporate sustainability or ESG reporting.
7. Split Incentives and Ownership Issues
This challenge is especially common in rented buildings or industrial parks.
Example: The tenant pays the energy bill, but the owner controls the equipment—so neither has full motivation to invest in improvements.
How it slows progress:
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Misaligned incentives make investment unattractive.
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Building owners avoid upgrades due to unclear return benefits.
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Tenants lack authority to make energy-efficient changes.
Practical solutions:
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Introduce green lease agreements sharing cost and benefits.
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Encourage collaboration between landlords and tenants for audits.
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Implement simple shared savings models to balance interests.
8. Technological Gaps and Outdated Infrastructure
Malaysia’s rapid industrial growth has left many facilities with legacy systems—inefficient HVAC, outdated lighting, and unoptimised motors.
Key obstacles:
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Old equipment runs longer and uses more power.
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Lack of integration between systems (e.g., lighting and HVAC).
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Low investment in automation and energy management software.
Fix it with:
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Energy retrofitting—upgrading lighting, insulation, or chillers.
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Automation and IoT systems to monitor and control usage.
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Regular maintenance to sustain system efficiency.
9. Limited Leadership Commitment
Top management support can make or break an energy efficiency initiative.
Why this matters:
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Without leadership backing, funding and long-term commitment suffer.
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Energy managers struggle to push for policy changes internally.
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Energy efficiency goals get sidelined by short-term business targets.
How to turn it around:
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Present EE as a strategic business advantage, not just a cost-saving measure.
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Showcase data-driven ROI projections.
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Link EE to ESG reporting and brand reputation benefits.
10. Lack of Integration with Sustainability and ESG Goals
Many organisations treat energy efficiency as a technical issue, not a sustainability strategy. But in today’s world, energy performance directly affects ESG scores and investor perception.
Why integration matters:
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Energy efficiency contributes to carbon reduction targets.
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It strengthens sustainability disclosures (e.g., Bursa, TCFD).
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It attracts investors and clients prioritising green performance.
Next steps:
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Incorporate energy data in ESG reports.
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Align EE actions with your company’s sustainability roadmap.
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Use ISO 50001 to systemise continuous improvement.
11. Cultural and Behavioural Barriers
Malaysia’s working culture often focuses more on operations than optimisation.
Small actions—like shutting off idle equipment—are often ignored, yet they matter.
Challenges include:
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Lack of ownership of energy-saving responsibilities.
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Habits hard to change without structured programs.
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Energy efficiency seen as “someone else’s job.”
Behavioural solutions:
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Create awareness campaigns with measurable targets.
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Provide incentives for departments that reduce consumption.
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Make energy performance visible—display dashboards or progress boards.
12. Lack of Collaboration Across Industries
Energy efficiency efforts often happen in silos. Companies rarely share lessons or data—even though many face the same challenges.
The result:
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Slow learning curve.
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Repetition of mistakes.
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Missed opportunities for industry-wide savings.
How to foster collaboration:
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Join energy management networks or industry alliances.
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Partner with local ESCOs and technology providers.
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Participate in government-led EE recognition programs.
13. The Role of Policy and Regulation
While Malaysia has taken strong steps through the National Energy Transition Roadmap (NETR) and Electricity Supply Act amendments, implementation consistency is still developing.
To make EE succeed nationally:
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Continuous engagement between policymakers and businesses.
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Updated standards to reflect global best practices.
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Public-private partnerships to fund scalable solutions.
14. Case Studies: Success Stories in Malaysia
Despite challenges, some Malaysian companies are setting examples:
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KLIA reduced energy use by upgrading chillers and lighting under ISO 50001.
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Sime Darby Property integrates green building and EE design in developments.
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Sunway Group tracks energy performance as part of its ESG framework.
These examples prove that energy efficiency isn’t just possible—it’s profitable.
15. Looking Ahead: The Future of Energy Efficiency in Malaysia
The push for carbon neutrality by 2050 means energy efficiency will only grow in importance.
Emerging trends include:
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Digital energy management platforms for real-time optimisation.
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AI and machine learning for predictive energy analytics.
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Integrated ESG reporting, linking energy data to corporate sustainability.
Organisations that act now will gain the advantage—lower costs, stronger ESG ratings, and improved competitiveness.
Conclusion
The Top Challenges to Implementing Energy Efficiency in Malaysia reveal that the barriers are real—but not unbeatable. With the right knowledge, tools, and commitment, every business can move from awareness to action.
If you’re ready to start your energy efficiency journey—or need help identifying where to begin—Techikara Engineering Sdn Bhd is here to guide you.
📞 WhatsApp or call 013-300 6284 today to speak with our energy experts and discover how your company can save energy, cut costs, and strengthen sustainability—starting now.
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