After a lot of initial failures and experiments for the right skillset I finally managed to win. Here's what I used:
- Velocious curse (instant cast for good damage)
- Endless fury (excellent for finishing him off under 20%)
- Conjured ward (damage shield)
- Bolt escape (imperative for kiting him)
- Entropy (excellent DoT with HoT)
- Blessing of restoration (good for emergency instant heal)
- Dark deal (replenishes health and mana at cost of stamina, as well as a good defense buff)
- Bolt escape
- Rapid regeneration (excellent HoT, kept it consistently running)
- Healing springs (good main heal)
Avoid using any spell/attack that slows down your movement. You don't
want to get caught close to him. Heavy staff attacks and crystal
shards, I found, were complete no-no's. I didn't have to use any of my
ultimates, but Negate Magic (or any ability that silences enemies)
would have surely helped.
When the dragons come and attack in a large group, be sure to block
with your weapon. The "god mode" buff allows you to deflect their
ranged attacks back at them. Just walk around deflecting and healing
while the dragons are present.
I did this with stage 4 vampirism, i.e., SUPER SLOW health
regeneration. Still pulled it off with the good HoT spells.
If you use summoned creatures, note that they won't agro Molag Bal at all. He only attacks you.
Most people I talked to were able to beat him at VR1, so it's
not uncommon to do so.
This guy's video shows another VR1 Sorcerer beating Molag Bal. He used a similar skillset to beat him and it's written in the comments.