Evaluating the Economic Feasibility of Agrivoltaic Systems: A Case Study of Solar Park Gambang

Abstract

Solar energy is a cornerstone of global decarbonization efforts, but its large land footprint creates a tradeoff between clean energy generation and competing land uses. Malaysia’s growing commitment to renewable energy has prompted exploration into land efficient technologies like agrivoltaic systems, which combine solar power generation with agricultural production. With increasing land use competition and national solar capacity targets, optimizing economic returns from such dual use systems is both timely and strategic. However, most feasibility studies have been conducted in temperate regions, leaving a gap in context specific economic assessments for tropical climates like Malaysia. Therefore, this study evaluates the economic feasibility of implementing an agrivoltaic system at the Gambang Solar Park in Malaysia. The study employed comprehensive financial modelling by incorporating capital and operational expenditures alongside revenue from solar energy, agricultural output and environmental benefits. The results indicate that the agrivoltaic system generated higher revenue although incurred greater total production costs. Nevertheless, it achieved a higher net profit of 2.41 percent more than the conventional configuration. In addition, the system demonstrated a stronger return on investment at 25 percent, a shorter payback period of 4.01 years, and an internal rate of return of 24.61 percent. These findings suggest that the agrivoltaic system offers a financially attractive and sustainable dual use land strategy within Malaysia’s renewable energy landscape.