This blog was written by Kanak Gokarn and Matteo Bizzotto, and edited by Barbara Riedemann, from ICLEI World Secretariat.

While parts of Europe and North America are slowing their push for renewable energy, Southeast Asia is moving in the opposite direction. Recognizing the long-term economic opportunities therein, the region’s clean energy transition is gaining speed driven not only by national goals, but increasingly by the leadership of local and regional governments.

Through the RENEW-Southeast Asia (RENEW-SEA) project, led by ICLEI, cities and provinces have shown that subnational ambition can translate into real action. Yet for this momentum to scale, national governments must align policies, unlock financing, and create the space for cities to lead.

Why Southeast Asia matters in the renewables race

In wealthier economies, shifting political priorities, grid constraints, and economic pressures are stalling renewable deployment. In contrast, Southeast Asia’s rising electricity demand, rapid urbanization, and falling technology costs are creating strong incentives for clean energy in pursuit of national climate change mitigation targets. Many Southeast Asian countries benefit from strong manufacturing experience and proximity to renewable energy supply chains. Moreover, renewables and renewables-based technologies also help tackle local energy and environmental problems, such as air pollution, sustainable cooling, and off-grid energy access.

Local and regional governments are especially well positioned to seize this opportunity. They are close to their communities, motivated to reduce costs and emissions, and eager to attract investment. But their ability to act is often limited by centralized governance, limited mandates in the energy sector, and a lack of financial resources.

In Indonesia, Malaysia, and Thailand — RENEW-SEA’s focus countries — energy markets and fiscal systems remain under national control, often to keep energy prices predictable. Even the most proactive cities will face barriers unless these frameworks evolve.

Enabling subnational leadership

Launched in late 2024, RENEW-SEA works with Yogyakarta Province in Indonesia; Melaka State and Hang Tuah Jaya in Malaysia, and Chiang Mai Municipality in Thailand, while engaging a wider network of “learning cities.” Its goal is to empower subnational governments to plan and implement renewable energy and energy efficiency measures within their jurisdictions.

Through workshops, peer exchanges, and targeted training, RENEW-SEA connects local leaders, national ministries, private companies, and civil society to identify practical entry points for local action. Multilevel governance dialogues helped stakeholders jointly assess challenges in renewable energy implementation. Lessons from these dialogues informed policy briefs for Indonesia, Malaysia and Thailand offering concrete recommendations for national governments on how to enable subnational energy action.

Alongside these, ICLEI and its partners developed practical guides, fact sheets and other tools to help local decision-makers navigate technical barriers and move from ideas to projects.

What worked and what still slows progress

Throughout 2025, capacity-building workshops and peer learning sessions across Indonesia, Thailand, and Malaysia drew dozens of local and regional governments. In Chiang Mai, a two-day dialogue revealed key bottlenecks such as restricted zones for rooftop solar and lengthy licensing processes. In Indonesia, provinces like West Nusa Tenggara shared their journey toward 100 percent renewables with peers in Yogyakarta, demonstrating how regional collaboration accelerates learning.

Malaysia offers one of the clearest examples of how local and state-level leadership can bridge national ambitions and community action. Melaka State, through the Melaka Green Technology Corporation, has taken concrete steps toward renewable energy adoption. Its Climate Action Plan 2020–2030 includes the Green Seal building certification program, tax incentives for energy-efficient technologies, and the promotion of smart meters. The corporation coordinates climate- and energy-related projects, aligning municipal actions with state and national targets and acting as a partner for both public and private entities.

Within Melaka, the municipality of Hang Tuah Jaya complements this approach through its Climate Action Plan 2030, which prioritizes solar-powered streetlights, efficient waste management, and energy efficiency in buildings and industry. Mayor Datin Sapiah binti Haron, who also serves as the Sustainable Energy Transition portfolio holder under ICLEI’s Executive Committee, has played a leading role in advancing these initiatives — showing how political leadership and local implementation can go hand in hand.

A highlight of RENEW-SEA was the virtual serious game that brought together participants from Malaysia, Thailand, and Indonesia. By role-playing as energy regulators, developers, and community leaders, participants gained a shared understanding of renewable energy technologies and the cooperation required for successful transitions.

Still, obstacles remain. In all three countries, energy planning and implementation are highly centralized, leaving cities little room to innovate, pilot new financing models, or access the resources needed for project preparation. Feasibility studies, legal structuring, and investment packaging remain out of reach for many municipalities.

National policies can also unintentionally undermine local efforts. Electricity subsidies, while essential for affordability, distort price signals and make renewables less attractive. Complex permitting processes and regulatory delays add to the challenge. Certain decisions — justified for security or grid stability reasons — can still slow renewable expansion.

However, RENEW-SEA’s findings show that full institutional overhauls are not needed. Existing mechanisms such as fiscal transfers, regional development funds, and national climate programs can be fine-tuned to better support subnational climate and energy initiatives. With clearer rules, targeted funding, and cross-level collaboration, local ambition can turn into measurable impact.

Scaling local renewable action: The national role

For Southeast Asia’s renewable energy boom to continue, national governments must enable action from all levels of government. National and subnational authorities must share responsibility for delivery.

Progress has been made as Indonesia, Malaysia, and Thailand liberalize electricity markets and develop mechanisms to support decentralized renewable energy and energy efficiency — such as Malaysia’s Solar ATAP scheme for rooftop solar and Thailand’s green tariffs. Yet more can be done to ensure that the benefits of these programs reach local and regional governments.

Unlocking dedicated funding streams is key. Fiscal transfers, national climate funds, and blended finance facilities can support city-level renewable and energy efficiency projects. Streamlined permitting can unlock rooftop solar, building retrofits, and community energy initiatives that have long been stalled. Cities should also be empowered to use their own assets — public buildings, fleets, and street lighting — as demonstration sites through mechanisms like sustainable procurement or performance-based contracts.

Regular platforms for dialogue between ministries, utilities, and local governments can prevent policy misalignment and resolve obstacles as they arise. Investments in local data systems, capacity building, and project preparation facilities will help cities design bankable projects that attract private investment. Ultimately, the national role is to enable, not dictate. With the right frameworks, cities can transform climate ambition into tangible progress — lighting homes, powering schools, and creating jobs through clean, locally driven transitions.

Looking ahead: Positive-energy buildings

A near-term opportunity lies in positive-energy public buildings; namely, facilities that generate more energy on-site than they consume. Municipalities manage many such assets, from schools to community centers, and can lead by example, reduce costs, and build public confidence in renewable solutions. Demonstrating success in their own operations can help cities strengthen internal capacities and local renewable energy value chains.

The RENEW-SEA project shows that even as global momentum wavers, Southeast Asia is pressing ahead. Cities are designing, piloting, and learning together, proving that renewables can thrive through local leadership. But this transformation cannot rest on cities alone. National governments must match local ambition with enabling policies and resources. Only then can Southeast Asia turn its renewable potential into a truly resilient and inclusive energy future.