Net Energy Metering (NEM)

What is Net Energy Metering (NEM)?

The Net Energy Metering (NEM) program was first introduced in 2016 as an incentive to further drive the adoption of solar energy in Malaysia but it wasn’t until 2019 that the program really garnered significant traction. Net Energy Metering (NEM) allows electricity consumers to supply their electricity from on-site generation of their solar PV system.  The NEM concept ensures that energy generated from the installed solar PV system will be consumed first, and for surplus (if any) to be exported to TNB on a “one-on-one” offset basis. A solar PV system can be installed at all domestic, commercial, and industrial premises as long as they are registered TNB customers in Peninsular Malaysia or Sabah Electricity Sdn. Bhd (SESB) for residents in Sabah and the Federal Territory of Labuan.

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What is Net Energy Metering 3.0 by SEDA Malaysia?

Net Energy Metering (NEM) 3.0 is a government initiative to encourage the use of solar energy among consumers in Malaysia starting from 2021 to 2023, with a quota allocation of 500 MW. Under NEM 3.0, three major new initiatives have been introduced to further increase the uptake of solar energy. Along with these three initiatives is the virtual NEM, which allows commercial and industrial sectors to distribute solar energy. This scheme is regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the implementing agency. Unlike the previous NEM 2.0 – where every kilowatt-hour (kWh) of excess energy was offset from energy bills at a “one-to-one” basis – the NEM 3.0 has a quota of 500MW that is available from 2021 till 2023.

The NEM 3.0 comprises of three initiatives as below:

  • Program NEM Rakyat (Domestic)

  • Program NEM GoMEn (Government Ministries and Entities)

  • Program NOVA (Commercial & Industrial)

 

Find the key points of the scheme summarised in the table below:

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NEM 3.0 NOVA Program (Commercial & Industrial) – Reopening 15th November 2021 (300 MW Quota)

Aimed at reducing business costs through the use of a solar PV system by the commercial and industrial sector the NOVA program enables successful applicants to:

  • CONSUME the electricity generated with a solar PV system

  • SELL excess electricity (generated with a solar PV system) back to the grid at market rate or System Marginal Price (SMP). The electricity sold will be converted to credits and will be reflected in the following month’s electricity bill.

  • OFFSET excess electricity (generated with a solar PV system) by distributing it through virtual aggregation up to 3 different electricity bill accounts under the same name.

 

The first instalment of the NOVA program had an allocated quota of 300 MW which started on the 1st of April 2021 was fully utilized within 3 months. The program was targeted to last until Dec 2023. Due to the overwhelming response, the government of Malaysia has decided to allocate an additional 300 MW to further drive the green agenda for Malaysia. The quota will be released on 15th November 2021.

NEM 3.0’s NOVA Programme: Eligibility

To qualify for the NOVA Programme, there are some eligibility criteria that you must meet, namely:

  • A consumer of the distribution licensee who has not been blacklisted in its system for various reasons (such as not paying the electricity bill, committing an offence, etc.)

  • Registered consumer of the distribution licensee in Peninsular Malaysia only

  • Not a delinquent who has not paid their bills or are involved in pending meter tempering cases

  • Subscribers of the following tariff (Refer to “What About NEM 2.0”)

NEM GoMEn (Government Ministries and Entities) Program

Aimed at reducing government building’s energy bills through the use of a solar PV system. The energy offset ratio is at 1:1. Roll-over period is for 12 months. The maximum solar PV system size allowed is 1MWac per account.The NEM GoMEn Program has an allocated quota of 100MW and starts 1 February 2021 with a 10-year contract term for successful applicants.

Do note that under the NOVA Programme, electricity can only be generated from solar PV panels. Other forms of renewable energy such as biogas, biomass, or micro-hydro may be allowed by the Energy Commission on a case-by-case basis.