What was once a sustainability conversation in boardrooms is now becoming a survival strategy.
As global oil markets swing on geopolitical tensions and electricity pricing becomes increasingly tied to fuel volatility, Malaysian companies are being forced to rethink how they view energy altogether. For many, solar is no longer a green initiative. It is becoming a financial shield.
BusinessToday sat down for an exclusive interview with Darren Tan, Chief Executive Officer of EFS Group, to understand how rising energy uncertainty is reshaping corporate decision-making, from ESG ambitions to pure cost survival.
Energy shocks are no longer temporary
For Tan, the idea that energy volatility is cyclical no longer holds.
What is unfolding, he argues, is a deeper structural shift driven by geopolitical instability, energy transition complexity and rising demand from digital infrastructure.
“We are seeing a transition from a cyclical challenge to a long-term structural shift,” he said. “Recurring disruptions are no longer exceptions. They are becoming the baseline.”
That shift is already filtering into Malaysia’s electricity cost structure. While regulated tariffs remain in place, Tan noted that a significant portion of pricing is still indirectly exposed to global fuel movements through mechanisms such as the Automatic Fuel Adjustment.
Even temporary relief is beginning to fade. The gradual reduction in AFA rebates, once a buffer for businesses, is now edging closer to neutrality, with uncertainty beyond July becoming a growing concern.
“What has functioned as a buffer keeping electricity bills lower may soon turn into a surcharge,” he said.
From ESG narrative to financial necessity
If energy volatility is the trigger, then the response from corporates has been a shift in mindset.
Solar adoption, once closely tied to ESG commitments and sustainability reporting, is now being evaluated through a far more immediate lens: financial predictability.
“Previously, solar adoption was often framed around ESG or sustainability goals,” Tan said. “Today, the starting point is overwhelmingly commercial.”
Rather than positioning solar as an environmental choice, companies are now looking at it as a way to stabilise long-term operating costs and reduce exposure to unpredictable pricing cycles.
The logic is increasingly straightforward. Energy is no longer being treated as a fixed overhead, but as a financial exposure similar to foreign exchange or interest rate risk.
“It moves with global events, directly impacts margins and if left unmanaged, introduces uncertainty into pricing and planning,” he said.
Why solar is becoming a hedge, not just a solution
This reframing has changed how companies evaluate solar investments.
Instead of focusing purely on sustainability returns, businesses are now prioritising visibility and control over energy costs.
“Solar delivers more than cost savings, it provides predictability,” Tan said. “When a portion of energy expenditure is stabilised, forecasting becomes more reliable and businesses are less exposed to forces beyond their control.”
That predictability, he added, is increasingly becoming a competitive advantage rather than just an operational benefit.
Industries with high and continuous energy demand are leading this shift. Manufacturing, data centres and cold chain logistics are particularly exposed, where electricity is not optional but embedded in core operations.
“In these sectors, energy is not just a cost line, it is core to operations,” he said.
The urgency factor: incentives and shifting financing models
The acceleration in solar adoption is also being supported by policy timing and financing evolution.
Malaysia’s Green Investment Tax Allowance, which allows businesses to offset up to 100% of solar project costs, is scheduled to expire in 2026, adding a window of urgency for corporates still considering the transition.
At the same time, electricity pricing mechanisms that adjust monthly based on fuel costs have effectively turned energy costs into a moving target.
Against this backdrop, early adopters are locking in long-term cost structures while volatility persists.
“Companies moving early are not just saving on energy, they are locking in a cost structure that becomes more advantageous the longer volatility persists,” Tan said.
Financing structures such as power purchase agreements are also lowering entry barriers, allowing companies to adopt solar without significant upfront capital investment.
ESG does not disappear, but it no longer leads
Despite the clear shift in priorities, Tan said ESG has not been abandoned. It has simply moved down the decision hierarchy.
“What is notable is that ESG does not go away, it tends to follow once the financial case is clear,” he said.
In other words, sustainability outcomes are now increasingly a by-product of cost-driven decisions rather than the primary motivation.
A broader shift in how energy is viewed
Ultimately, Tan believes the biggest change is not technological but psychological.
Energy, he said, is no longer being seen as a stable utility but as a volatile input that must be actively managed.
“Businesses are less willing to remain fully exposed to external variables,” he said. “Solar is increasingly seen not just as a sustainability initiative, but as a strategy to localise energy costs and protect margins.”
As global uncertainty persists, from geopolitical tensions to shifting trade flows, that mindset shift may prove to be the real turning point.
What was once a question of going green is now becoming a question of staying resilient.
