Net Energy Metering (NEM) allows self-consumption of electricity generated by Solar PV system users, while selling the excess energy at the prevailing Displaced Cost to Distribution Licensee (TNB/SESB).
Introduced to encourage Malaysia’s Renewable Energy (RE) uptake, the concept of NEM was changed from the existing net billing to true net energy metering. The NEM scheme was made effective on 1 st January 2019, by the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC), regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the implementing agency.
Malaysia has allocated a quota of 500MW for NEM up to year 2020. Quota allocation will be divided into domestic and non-domestic category. The NEM category has been divided into 4 categories as below:
It is a new mechanism designed to replace the Feed-in Tariff (FiT) which already closed for registration since 2016.
This is relevant for consumers that fall under the high electricity tariff block. In many countries, NEM is often used to hedge any future fluctuation of increase in utilities tariff.
This NEM scheme is only applicable in Peninsular Malaysia and applicants must be registered as TNB customers.
How NEM Works
NEM allows self-consumption of electricity generated by solar photovoltaic (PV) system users, while selling the excess energy to Distribution Licensee at prevailing Displaced Cost.
The energy generation by NEM consumer will be consumed first which implies less energy import from the utility. The more energy generated from the Solar PV system is self-consumed, the more NEM consumers can save their utilities cost.
The excess energy will be recorded in credit form by a bi-directional meter and the energy credit will then be offset on a “one-on-one” basis per kWh unit.
The priority is for self-consumption, however some premises especially industry or manufacturing companies which may not be operating during the weekends may have excess energy exported to the grid. The credit shall be allowed to roll over for a maximum of 24 months.