Exploring the Benefits of Net Energy Metering in Malaysia

Estimated Reading Time: 7 minutes

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What is Net Energy Metering?

Imagine this scenario: you’ve got a trusty solar PV system up on your roof, soaking in all that glorious sunlight. Now, here’s the kicker – during those sun-soaked daylight hours, your solar panels might be working overtime, producing more electricity than you actually use.

That’s where net metering comes into play, and it’s not only simple but also a pretty smart way to make the most of your solar investment:

How Net Metering Makes It Happen

1. Putting Surplus Energy to Good Use: Imagine your rooftop adorned with solar panels, basking in the sun’s glory. During the day, these panels might generate more electricity than your home or business can consume. That’s where the magic begins.

2. Running the Meter Backwards: If you’re part of a net metering program, your electricity meter doesn’t just count up; it goes in reverse too! When your solar panels produce excess power, the meter runs backward, giving you a credit for the electricity you’re sending back to the grid.

3. Credit for Future Use: This credit isn’t just for show. It’s there for you to tap into during nighttime or whenever your electricity use exceeds your solar system’s output. You’re only billed for the “net” energy you use, thanks to that handy banked energy.

4. Sharing Solar Goodness: But the beauty of net metering doesn’t stop there. Approximately 20-40% of the electricity your solar system generates is shared with your neighbours through the grid. It’s like your excess energy is lighting up homes across your community.

Net Energy Metering in Malaysia

Let’s dive into the world of Malaysia’s Net Energy Metering Scheme (NEM) and how it’s been evolving to make solar power accessible and rewarding for everyone.

NEM’s Bright Beginning

Back in November 2016, NEM started with a 500 MW quota until 2020. The goal? Encourage Renewable Energy (RE) adoption. The concept was simple: solar PV systems would first power your own place, and any extra energy would be sold to the grid at market rates.

The original NEM concept was straightforward: solar PV systems first powered your own needs, and any extra energy sent to the grid earned compensation at the prevailing market rate, determined by your system’s size. Unfortunately, this setup didn’t attract much interest due to its limited financial rewards, resulting in lower adoption rates.

NEM 2.0: A Solar Game-Changer

NEM 2.0 came into play on January 1, 2019. It introduced true net energy metering, letting you export excess solar power back to the grid on a “one-on-one” basis. People loved it! By the end of 2020, the 500 MW quota was fully subscribed.

Introducing NEM 3.0: The Solar Revolution Continues

On December 29, 2020, NEM 3.0 burst onto the scene, active from 2021 to 2023. With a whopping 1050 MW allocation, it’s all about making solar accessible to everyone. NEM 3.0 brings three new initiatives, giving you even more ways to harness the power of the sun and cut your electricity bills.

Net Energy Metering 3.0 By SEDA

Net Energy Metering 3.0, introduced on December 29, 2020, in response to a surge in demand from the solar industry, is set to run from 2021 to 2023. With a substantial total quota allocation of up to 500 MW, NEM 3.0 ushers in a new era of solar possibilities.

The NEM 3.0 will be divided into the following three new initiatives/categories:

Initiative/Categories Quota Allocation (MW) Quota Opening Date
NEM Rakyat Programme (Residential) 100MW 1st February 2021 – 31st December 2023
NEM GoMEn Programme (Government Buildings) 100MW 1st February 2021 – 31st December 2023
NOVA Programme (Commercial, Industrial, Agriculture and Mining Buildings) 300MW 1st April 2021 – 31st December 2023

How Does NEM 3.0 Work?

Sit tight for a detailed breakdown of all three categories of NEM 3.0 below!

NEM Rakyat Programme (Residential)

Imagine your residential premises decked out with solar PV systems. Any extra electricity you generate won’t go to waste – it’ll be sent to the grid and credited to your account on a 1:1 offset basis. What does that mean? Well, your excess energy can help you offset future electricity bills, and these credits can roll over for up to 12 months!

For those of you wondering about system sizes, homeowners can install solar PV systems of up to 4KW for single-phase homes and 10KW for three-phase homes. That’s plenty of power to brighten up your day.

A generous 100MW quota has been set aside for the NEM Rakyat Programme, kicking off on February 1, 2021, with a 10-year contract for successful applicants. But remember, this program stays open only until the quota is filled or until December 31, 2023 – whichever comes first.

To date (13/09/23), approximately 75% of the quota has been applied for.

The eligibility requirements for the NEM Rakyat Programme application are as follows:

  1. Users who are registered or are applying to register with TNB in Peninsular Malaysia.
  2. Users/applicants who have not installed any solar PV system under any previous photovoltaic solar program.
  3. Applicants must be domestic users occupying their privately-owned premises, not for hotels, hostels, any form of businesses, trades, professional activities, or services.

NEM GoMEn (Government Buildings)

This programme aims to lower the electricity bills of government-owned buildings by using solar PV systems. Under this programme, any excess energy generated will be exported to the utility grid and will be paid on a 1:1 offset basis. The credit shall be allowed to roll over for a maximum of 12 months. The maximum size of a solar PV system allowed is 1MW per customer.

A 100MW quota has been allocated for the NEM GoMEn Programme with a 10-year contract for successful applicants. This program stays open only until the quota is filled or until December 31, 2023 – whichever comes first.

To date (13/09/23), approximately 20% of the quota has been applied for.

NOVA (Commercial and Industrial)

A 300MW quota has been set aside for the NOVA Programme, kicking off on April 1, 2021, with a 10-year contract for successful applicants. This program stays open only until the quota is filled or until December 31, 2023 – whichever comes first.

The NOVA Program revolves around the idea that the energy your solar PV system generates should primarily benefit you. So, when you produce more energy than you can use at home (imagine those sunny days), what happens to the extra power?

Category A: Self-Consumption at Its Best

If you’re in Category A, any surplus energy produced in a month that you don’t use at your commercial building can be sent back to the grid. Here’s the cool part: the value of that exported energy is credited to your account. Come the next billing period, those credits offset your bill payment. It’s like saving money in your energy piggy bank!Now, a few details to keep in mind:

  • The unit price of the exported energy is based on the Average SMP.
  • You can only use excess energy exported in the month to offset your next billing period, so no worries about losing out.
  • However, these credits can’t be used to offset the minimum monthly charge as stated in the tariff schedule.

Category B: Sharing Is Caring

Now, if you’re in Category B, your surplus energy can go even further. Say you’ve got more solar power than you need – you can export it to up to three other designated premises. And just like in Category A, the value of the exported energy is credited to those designated premises’ accounts. They get to enjoy lower bills and you get to spread the solar, all with the power of net energy metering in Malaysia

A few additional details:

  • The unit price of the exported energy is based on the Average SMP.
  • You can export any extra energy generated in a month, which you don’t use at your premise, to up to 3 Designated Premises via the supply system.
  • For the purpose of Category B, a Designated Premise includes any premises used or operated by your wholly owned subsidiary company.
  • All these premises should have the same billing period to keep things streamlined.

To date (13/09/23), approximately 75% of the quota has been applied for.

How To Apply For NEM 3.0

In Malaysia, there are two ways to obtain solar

  1. Outright purchase from a PV Service Provider (Solar Companies)
  2. Leasing from a PV Investor (Solar Developer)

All you have to do is follow the steps below and you’ll have a hassle free process of applying for NEM 3.0.

How to apply for NEM with TNB

Follow this step by step guide to generate electricity from your own solar PV system Find your registered contractor/ service provider (RC/ SP), and they will help you settle the rest of the application process.

  1. Step 1: (RC/ SP) you will apply for a Technical Assessment with TNB (if applicable)
  2. Step 2: (RC / SP) you will get approval/quota from SEDA
  3. Step 3 :(RC/ SP) you will install a solar PV System
  4. Step 4: (RC/ SP) you will submit a meter application to TNB
  5. Step 5: Sign your NEM contract with TNB

Net energy metering in Malaysia helps property owners reduce their electricity bills or even make a profit with excess electricity from their solar system. It makes solar more affordable for property owners who would otherwise be shelling out extra sums for solar energy storage. 

With Malaysia’s 2025 target of 31% total power capacity from renewable energy sources, solar adoption is expected to increase substantially. Already, 25-50% of the 500 MW quota by 2023 has been filled. If you want to enjoy the financial benefits of net energy metering in Malaysia, you really can’t afford to wait. 

Conclusion: Embrace Solar Savings in Malaysia!

So, if you’re considering rooftop solar for your home, you’ve come to the right place. We’ve explored the ins and outs of the price of installing and maintaining a solar panel system in Malaysia, and now you’re armed with the knowledge to make an informed decision.

But why stop here? Take the next step on your solar journey by checking out our article on the Top 10 Solar Companies in Malaysia. Finding the best installer for your roof is a breeze, and you can kickstart your solar savings adventure right away. It’s time to embrace sustainability, savings, and a brighter future with solar power!

GetSolar: Who Are We?

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At GetSolar (formerly Solar AI) we’re a passionate team based in Singapore committed to the mission of decarbonising our energy grid. Our innovative rent-to-own solar model is designed to bring solar energy within reach for homeowners, removing upfront costs and simplifying the process with a straightforward monthly payment plan. This approach effectively overcomes the challenges associated with embracing solar energy.

As of now, our services are exclusively available within Singapore’s borders. However, we invite you to connect with us on our social media platforms. The future holds exciting possibilities, and who knows, we may expand our reach beyond Singapore one day. When that time comes, you’ll be among the first to know!

This article was first published on 27 December 2021 and last updated on 13 September 2023 to include additional details.

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