Yeo Bee Yin, who is Malaysia's minister for energy, science, technology, environment and climate change, said the country is targeting to generate 20% of its electricity from renewable energy sources by 2025 — up from 2% currently.
Playing down the possibility of a carbon tax, Yeo suggested that solar energy is a viable option for Malaysia, a tropical country.
"We are a developing country. We want to look into what will be the best solution, as in the best economical solution for us first before looking into taxing ... people (more). For example, energy efficiency. Energy efficiency saves your electricity bill as well as decarbonizing. Can we incentivize that?"
For instance, "solar is getting cheaper; can we make it cheaper so that people go into it?" she told CNBC at Singapore International Energy Week.
As the cost of renewables becomes more competitive with fossil fuels, interest in cleaner energy solutions grows.
Neighboring Singapore said on Monday it plans to speed up the use of renewable energy, particularly in solar, the country's trade and industry minister told CNBC.
There have also been concerns about Malaysia's August decision to extend a license for Australia's Lynas Corp for processing rare earth minerals, due to worries about radioactive waste from the production process.
Lynas has said the low-level radioactive waste is not hazardous, Reuters reported.
Yeo told CNBC that Lynas' license was extended to the company with tougher terms attached and that the Australian company will have to manage their production process and waste disposal to ensure that there will be no radioactive waste in four years.
The Malaysian prime minister's office had said that not renewing Lynas' licence would lead to job losses. It would also have a "negative impact on Malaysia's credibility as a business-friendly country," Reuters reported.
Yeo also faced calls for resignation over concerns that an Indonesia subsidiary of Malaysia's IOI Corporation — linked to her husband's family — is one of the entities that allegedly caused forest fires which spread heavy pollution or haze across the region in September. IOI has refuted the allegations, Malaysian newspaper The Star reported.
When asked by CNBC on whether there is a conflict of interest, Yeo said:
"On the haze problem ... Indonesia has full power to investigate and to charge any companies, whether they are Malaysian, Singaporean, Chinese or Indonesian. Any company that is found to be a culprit of starting forest fires — if they think that any companies do that — they can charge them and they have full power. And Malaysia is in the position that they should charge them without fear or favor."