How Net Energy Metering (NEM) Works

Overview of NEM

NEM Concept

NEM - FAQ

NEM Guidelines

Net Energy Metering (NEM) Concept

What is NEM ?

The concept of NEM is that the energy produced from the solar PV system installed will be consumed first, and any excess to be exported and sold to the distribution licensee (such as TNB /SESB ) at the prevailing Displaced Cost prescribed by the Energy Commission. This scheme is applicable to all domestic, commercial and industrial sectors as long as they are the customers of TNB (Peninsular Malaysia) or SESB (Sabah and FT Labuan). The PV systems are allowed to be installed at available rooftops or car porch only within their own premise. Based on FiT experience, solar PV is a technology that requires minimal construction and with high take up rate compared to other RE technologies. One factor driving such growth is the declining cost of solar PV systems in recent years. As solar PV technology is more applicable to the NEM, it is the only technology whereby the public at large can play their role in addressing climate change by generating the clean energy, hence reduce the energy consumption from electricity generated by fossil fuel powered generators.

NEM scheme is ideally suitable to complement the current FiT and Large Scale Solar programmes. The NEM scheme is widely adopted globally and can further contribute in achieving the national RE target, and reduce dependency on imported fossil fuels.

What are the benefits of NEM ?

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 electricity bills (by reducing the electricity imported from the utility). This is especially relevant for consumers that fall under the high electricity tariff block. In many countries, NEM is often used to hedge any future fluctuation or increase in electricity tariff.

Under the NEM, any excess energy generated will be exported to the utility grid and will be paid at the prevailing Displaced Cost as prescribed by the Energy Commission. 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 and net-off at prevailing Displaced Cost.

By generating their own clean energy, consumer will contribute to the reduction of CO2 emission, hence reducing the carbon foot print and mitigating climate change.

Net Energy Metering (NEM) Malaysia Update 2019