NEM 3.0 & Future

Net Energy Metering (NEM) 3.0

Based on the current drastic changes in the business environment and our lifestyle, SEDA has confirmed that it is imminent that a revision of the NEM 2.0 will take place. The NEM 3.0 is on the horizon. SEDA wants NEM 3.0 to be effective in the long game, and continue to nurture the rooftop solar potential in Malaysia. The primary goal of implementing NEM is to assist Malaysians in reducing their electricity bills while contributing positively to the environment. 

The NEM scheme is a solar PV programme unveiled under the Budget 2016. It was introduced to complement the Feedin Tariff (FiT) mechanism to encourage the deployment of RE as outlined in the 11th Malaysia Plan. Under the NEM, 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 at a prevailing Displaced Cost prescribed by the Energy Commission. It was later tweaked to be implemented under a one-to-one basis from January 2019.

It is important to make Renewable Energy to be relevant in the economic growth of the country. SEDA Malaysia has an instrumental role in shaping the future of Malaysia’s RE sector. They have a pool of dedicated experts in the areas of energy efficiency and they have been involved in technical facilitation as well as providing training to the private sector, local authorities and state governments.

SEDA Malaysia will continue with its promotional and awareness campaigns on NEM to attract more Malaysians to be participants. Dialogue sessions are also frequently organized by SEDA Malaysia to further promote awareness on NEM among the stakeholders. Plans are in the pipeline to use the mainstream media as a platform to embark upon an integrated NEM awareness campaign. 

The local solar photovoltaic (PV) industry has been growing rapidly since the Net Energy Metering (NEM) scheme was improved to a one-to-one basis for any energy export to the grid effective from 1st January 2019.

In 2019, a total of 1,252 applications representing 102.41MW of NEM was approved, bringing the cumulative approved capacity of NEM to 130.21MW. The increase of NEM 2019 alone was nearly 3.68 times the total capacity approved from 2016 to 2018. As of 30th June 2020, 43.86% of the 500 MWac NEM quota allocated by the Government had been taken compared to 26% as of end-2019 and 5.4% as of end-2018.

Looking at the surging trend of NEM applications, it is very predictable that NEM 3.0 will be inevitable. According to SEDA Malaysia, funding for solar PV-related projects are available from local financial institutions, but these are somewhat focused on large scale projects and those for commercial and industrial sectors under the NEM.

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