What is Net Energy Metering?

From NEM and NEM 2.0 to NEM 3.0 TNB, the Net Energy Metering initiative of Sustainable Energy Development Authority (SEDA) Malaysia has undergone several iterations beginning in the year 2016 when it was introduced as a form of solar incentive to encourage the use of solar energy or renewable energy resources within Malaysia.

The SEDA-implemented NEM is being executed by the Ministry of Energy and Natural Resources (KeTSA) and regulated by the Energy Commission (EC).

NEM or net energy metering is an initiative that began in November 2016 as a way for the Malaysian government to boost the overall preference for renewable energies such as the use of solar PV installation systems. Its first quota allocation was 500MW, which was slated to run from 2016 to 2020. In concept, the goal of NEM is to utilize first the energy produced by solar PV installations, with the excess channeled back to TNB at the displaced cost prevailing at the time.

While the NEM initiative began in 2016, it was in 2019 that it allowed for the excess energy generated through solar PV to be distributed back to the grid on a 1:1 offset arrangement. This updated NEM arrangement was named NEM 2.0. By December 31, 2020, the NEM/NEM 2.0 quota allocation of 500 MW was successfully attained and consumed.

What about the NEM 3.0 SEDA Malaysia?

After the full subscription of NEM 2.0, NEM 3.0 then took effect in its place. Like the original NEM and NEM 2.0, it still has 500MW for its quota, and is being scheduled to run from 2021 to 2023. The new NEM 3.0 is implemented to continue the successful uptake and preference for solar energy systems by consumers in Malaysia. The enhanced NEM programme has spawn new solar business opportunities for investors in which customers can opt to purchase solar electricity via signing power purchase agreement (PPA) with solar investors, via solar leasing programme or hybrid of both as offered by solar investors