Net Energy Metering 3.0 (NEM 3.0) announcement

The Net Energy Metering program was introduced in 2016 (with a 500MW allocation) as a solar incentive to further boost the uptake of solar adoption in Malaysia but it wasn’t till 2019 that the program really took off. In changing the program’s energy offset ratio to 1:1 and touting it as NEM 2.0 – the new offset ratio made recuperating the heavy expenses on a solar PV system much shorter. This made the program wildly popular among home and business owners alike.

In 2020, the remaining 442MW of the 500MW allocation for NEM was snapped up across sectors such as residential, commercial, industrial and agriculture. A month after the final allocation of NEM 2.0, the Ministry has now announced NEM 3.0 in a joint statement released by both the Energy Commission (ST) and Ministry of Energy and Natural Resources (KeTSA) of Malaysia.

The NEM 3.0 program will be available from 2021 till 2023 with a quota of 500MW allocated. During NEM 3.0, three new main initiatives will be introduced to further boost the uptake of solar adoption. Also introduced among these three initiatives is “virtual NEM” – allowing the commercial and industrial sectors to distribute solar power.

The three main initiatives are:-
• NEM Rakyat Program
• NEM GoMEn (Government Ministries and Entities) Program
• NOVA (Net Offset Virtual Aggregation) Program

Aimed at reducing energy bills by generating your own electricity through the use of a solar PV system. The energy offset ratio is at 1:1. Roll-over period is for 12 months. The maximum solar PV system size a homeowner is allowed to install is 4kWac and 10kWac for single phase and three phase homes respectively.

The NEM Rakyat Program has an allocated quota of 100MW and starts 1 February 2021 with a 10-year contract term for successful applicants. The program lasts till the quota has been fully allocated or by 31 December 2023 (whichever comes first).

Aimed at reducing government building’s energy bills through the use of a solar PV system. The energy offset ratio is at 1:1. Roll-over period is for 12 months. The maximum solar PV system size allowed is 1MWac per account.

The NEM GoMEn Program has an allocated quota of 100MW and starts 1 February 2021 with a 10-year contract term for successful applicants. The program lasts till the quota has been fully allocated or by 31 December 2023 (whichever comes first).

Aimed at reducing business costs through the use of a solar PV system by the commercial and industrial sector the NOVA program enables successful applicants to:

i. CONSUME the electricity generated with a solar PV system
ii. SELL excess electricity (generated with a solar PV system) back to the grid at market rate or System Marginal Price (SMP). The electricity sold will be converted to credits and will be reflected in the following month’s electricity bill.
iii. OFFSET excess electricity (generated with a solar PV system) by distributing it through virtual aggregation up to 3 different electricity bill accounts under the same name.

The NOVA Program has an allocated quota of 300MW and starts 1 April 2021 with a 10-year contract term for successful applicants. The program lasts till the quota has been fully allocated or by 31 December 2023 (whichever comes first). More info will be released prior to the launch date.

The views expressed by the author, Michael Leong, are of the author’s own and do not represent the opinions of any entity with which he have been, am now, or will be affiliated.

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