Solar Power Surpassed Gas Costs in Southeast Asia
A new study indicates solar energy became significantly cheaper than gas-fired power across five nations in 2025.
Updated on Oct. 6, 2026 in Energy
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Zero Carbon Analytics reports that solar electricity was 50 per cent cheaper than gas on average across five Southeast Asian countries in 2025. The region currently faces a crossroads as it considers nearly 49 gigawatts of planned gas power capacity.
Why it matters
Choosing solar energy over planned gas projects could save the region US$45.4 billion in costs. Shifting to renewables also aligns with emerging corporate and industrial power purchase frameworks being adopted in the region.
The analysis utilizes lifetime levelised cost of electricity data sourced from BloombergNEF, the International Energy Agency, and Global Energy Monitor. By 2030, solar generation costs are projected to be 84 per cent lower than gas across the region.
The players
Zero Carbon Analytics
This is a climate and energy research organization that produces data-driven analysis on the transition to net-zero power systems.
Microsoft Indonesia
This entity is a regional subsidiary of the American technology giant that recently signed a deal to procure renewable energy.
The details
Vietnam leads the planned expansion with 34.5 gigawatts of gas capacity, followed by Malaysia with 9.6 gigawatts. While nations like Thailand and Vietnam are piloting direct power purchase frameworks for renewables, the region continues to develop significant gas infrastructure.
Timeline
Malaysia introduced a renewable energy supply scheme in 2024.
Solar power was 50 per cent cheaper than gas in 2025.
Vietnam expanded its direct power purchase framework in 2026.
Solar is projected to be 84 per cent cheaper than gas by 2030.
Deeper Dive
The findings on solar costs in Southeast Asia align with the International Energy Agency's Net Zero by 2050 pathway for global power sector decarbonization. This study marks a departure from historical energy modeling that favored fossil fuel expansion in emerging markets.
The transition to cheaper solar power could lead to lower energy costs for industrial and commercial users as direct power purchase schemes expand. Improved renewable infrastructure also promises potential increases in green energy availability for regional data centers and electric vehicle networks.
The takeaway
Solar energy is now an economically superior alternative to gas power in Southeast Asia. Regional policymakers may increasingly prioritize renewable projects as the projected cost gap between solar and gas widens toward 2030.
Further reading
For more information on global energy market shifts, visit the /science/energy/ section.
Live Poll
Should your nation prioritize solar power over building new gas power infrastructure?
