Techno-economic analysis of grid-connected floating solar PV on Malaysian hydropower reservoirs

The integration of floating solar photovoltaic (FPV) systems on hydropower reservoirs presents a promising dual-use solution for enhancing renewable energy capacity in Malaysia while optimizing existing water resources. This study conducts a comprehensive techno-economic analysis of deploying grid-connected FPV systems on major Malaysian hydropower reservoirs such as Kenyir, Bakun, and Temengor. Technically, the FPV systems offer advantages including higher energy yield due to natural water-based cooling effects, reduced land usage conflicts, and synergistic operation with hydropower for improved grid flexibility. The proposed hybrid configuration enables peak shaving, seasonal balancing, and more stable voltage-frequency regulation through coordinated dispatch strategies. A combination of HOMER Pro and PVSyst simulations is used to assess energy output, capacity factors, and grid interconnection constraints under Malaysia's irradiance and humidity conditions. Economically, the Levelized Cost of Electricity (LCOE) of FPV systems is evaluated and benchmarked against ground-mounted PV and conventional hydropower. Sensitivity analyses consider key factors such as module degradation, anchoring costs, BESS integration, and policy incentives (e.g., Net Energy Metering 3.0). Results indicate that a 50 MW FPV system co-located on a hydropower reservoir can achieve an LCOE as low as RM0.22/kWh, with payback periods under 8 years, assuming optimal deployment and access to green financing. Additionally, environmental co-benefits include reduced water evaporation, lower algal growth, and enhanced aquatic biodiversity. This study concludes that FPV-hydro hybrid systems represent a viable and sustainable pathway for accelerating Malaysia's low-carbon energy transition and meeting its RE capacity targets under the National Energy Transition Roadmap (NETR).