What is Net Energy Metering?

Net Energy Metering is a solar incentive project of Sustainable Energy Development Authority (SEDA) Malaysia. The government first introduced it in 2016, and was slated to run until 2020 with a quota allocation of 500MW. Since its first introduction in 2016, the net energy metering initiative has undergone various phases or iterations, with the NEM 3.0 being the most recent in 2021.

Essentially, the Net Energy Metering scheme was introduced by the Malaysian government to promote the use of renewable energy resources, specifically solar PV installations, within domestic, commercial, and industrial settings. The governing entities of the initiative are the following: SEDA, KeTSA or the Ministry of Energy and Natural Resources, and EC or the Energy Commission.

Under the NEM concept first introduced in 2016, the arrangement was that after the solar energy from the installed system has been consumed, the excess will then be exported to the Tenaga Nasional Berhad (TNB) at the normal displaced cost.

Beginning in 2019, with the adoption of NEM 2.0, the 1:1 offset arrangement became the prevailing agreement for excess energy generated but not consumed within the premises. By December 2020, the original quota allocation for NEM at 500 MW, which was later taken up by NEM 2.0 as well, was fully consumed by subscription. This gave birth to the NEM 3.0 initiative.

To continue promoting the use of solar PV systems as means for a renewable energy source, the NEM 3.0 was introduced after the full subscription of the NEM 2.0 initiative on December 2020. The NEM 3.0 is designed to run from 2021 to 2023. Unlike the previous two iterations of NEM, NEM 3.0 is categorised into three different sub-programs.