Telcos bet on solar

FOR an industry that deals in invisible waves and wireless wonders, the telecommunication industry definitely burns through a vast amount of electricity each day.

Whether it’s a rural base station beaming 5G across a paddy field or a hyperscale data centre crunching through cloud storage, telecommunications companies (telcos) are among the world’s biggest energy consumers.

Is it any wonder then that many such companies, not just in Malaysia but across the globe, are venturing into solar?

Be it outfitting off-grid or remote cell towers with solar panels or partnering with renewable energy companies, these companies are on a journey to impress both investors and consumers with their green action.

Edotco Group Sdn Bhd is the first regional and integrated telecommunications infrastructure services provider in Asia.

Being one of the world’s largest telecom tower companies, it manages more than 55,000 towers in Asia, including in Malaysia, Indonesia, Myanmar, Pakistan and the Philippines.

Its foray into solar is multifaceted – it pioneered the deployment of a hybrid renewable energy system combining solar power, electrolyser-based fuel cells with hydrogen storage, and lithium batteries to power remote, off-grid base transceiver stations in challenging terrains such as Sabah.

Edotco has also installed renewable energy systems at approximately 1,100 sites, and collaborated with other companies to support electric vehicle (EV) charging stations.

Its Malaysian business director Gayan Koralage says energy management has become a cornerstone of success in the telecommunications sector, particularly as 5G networks demand up to three times more power than 4G.

“This surge in energy consumption amplifies longstanding operator challenges; balancing rising power costs with the imperative for uninterrupted uptime.

“We addressed these pain points through holistic power solutions designed to ensure reliability of up to 99.999% for our sites,” he tells StarBiz 7.

According to Gayan, telcos venture into solar for several reasons, chiefly economic and operational.

“Economically, solar helps improve earnings before interest, taxes, depreciation and amortisation margins by offering stable, long-term electricity costs and shielding companies from energy price hikes,” Gayan says.

However, he cautioned widespread adoption hinges on achieving an influx point where the total cost of solar panels, amortised over their lifespan, falls below prevailing electricity tariffs.

He adds this is a threshold already crossed in many off-grid and poor-grid regions, where solar is now the most viable alternative to costly diesel generators.

Sustainability targets have also been a key motivator, as operators strive toward net-zero carbon emissions, Gayan explains.

Across the seas, we see firms like American Tower Corp, which deploys an Energy-as-a-Service model by selling surplus solar energy from its tower sites to local grids in countries like Brazil and India.

In some parts of Africa, Vodafone is using solar to power towers and extend energy access to nearby communities via microgrids, while also bundling solar with Internet of Things solutions for sectors like agriculture.

“Similarly, MTN Group in Nigeria and Uganda leases solar-powered towers to smaller operators and channels excess power to support local businesses like cold storage facilities.

“These examples illustrate the multifaceted potential of solar not just as a power source, but as a strategic business enabler.”

Time Dotcom Bhd is another telco that has ventured into solar, making it more apt as it aligns with its extensive experience in rolling out fibre optic networks.

The group says the utilisation of solar energy within the group has directly helped them to manage and potentially lower energy costs by offsetting the demand for grid-based electricity.

It has also significantly reduced the carbon footprint associated with its Scope 2 emissions.

“This strategic move aligns cost efficiency with environmental responsibility, providing dual benefits to the business and society at large,” the group notes.

“The same benefits apply to customers who use solar energy.

Time’s solar energy business – Emit Solar – has simplified adoption and offers consumer-friendly models like Rent-to-Own, making solar financially accessible.

This also contributes to Malaysia’s overall carbon reduction goals,” it says.

It adds that currently, the focus of its solar energy business is on the residential market – to bring clean, affordable energy to more Malaysian homeowners.

Meanwhile, giants like AT&T and Vodafone are likely to remain the yardsticks to inspire efforts of local companies on their renewable energy (RE) journey.

Kenanga Investment Bank Bhd equity analyst Nigel Ng says that while Malaysia targets 70% RE capacity by 2050, challenges still remain.

Ng explains that limited large-scale renewable procurement, a rigid grid, and lack of strong telecommunications-specific climate targets are some of the issues being faced today.

“To catch up, Malaysia must expand green power deals, modernise the grid, introduce supportive policies like green bonds and Renewable Energy Certificate (REC) markets, and boost environmental, social and governance (ESG) transparency in the telecom sector,” Ng says.

He adds that telcos have been smart riding into the solar field as a means of expanding their services.

“Many telcos are entering the solar market to unlock new revenue streams that boost average revenue per user, secure market share, and build stickier customer relationships, especially since customers often commit to 10-year contracts,” he says.

Historically, electricity prices have steadily risen, pushing homeowners to seek cost-saving solutions like installing solar panels which typically offer attractive return of investment of less than five years.

Gayan says the role of proper policies cannot be understated enough.

He says cohesive frameworks that incentivise private investment in research and development – such as tax breaks for artificial intelligence-integrated solar farms or grants for floating solar pilots will be essential.

“Public-private collaborations, like those seen in the National Energy Transition Roadmap’s large-scale storage projects, must become the norm rather than the exception.

“Simultaneously, workforce development programs will ensure local expertise keeps pace with technological advances, turning Malaysia’s demographic dividend into a skilled green workforce,” he adds.

But, will companies see good returns from this?

Ng says impact on earnings will likely be minimal, however the move into solar is more about maintaining and growing market share.

“Maxis Bhd, for example, consumed 465 gigawatt hours of electricity in 2024 – a hefty amount.

“By offering solar via fixed monthly subscription plans instead of outright sales, telcos can retain ownership of the solar assets and claim the REC’s.

“These RECs can then offset Scope 2 emissions, turning a consumer offering into a strategic ESG advantage.”