What is Net Energy Metering (NEM)?

Net Energy Metering (NEM) was implemented to make solar PV adoption more appealing. After it has been updated whereby excess generated electricity is now offset by a 1-to-1 ratio, it is as appealing as ever!

Net Energy Metering(N.E.M) is a programme/scheme implemented by the Sustainable Energy Development Authority(SEDA) Malaysia. The scheme itself is meant to cultivate and further propel solar PV adoption among the nation. Feed-In-Tariff (FiT) was the first scheme available for solar PV adopters, FiT is now discontinued and has been replaced by NEM.

Successful applicants for NEM allows solar PV system owners (new or existing and not tied to FiT) to export excess solar energy back to the grid.

Exported solar energy will be granted credits which offsets on a 1-to-1 ratio in the following months TNB bill onwards.

These credits lasts up to 24 months.

Net Energy Metering scheme is available for applicants who own a solar PV system – means you need to have purchased a solar PV system already. And are open to individuals or businesses, even existing solar PV system owners are welcome to apply.

Applicants of Net Energy Metering have until the end of year 2020 to apply. Bear in mind, there is a quota allocated for NEM.

The application process can take anywhere from an estimated 1 to 3 weeks. An email will be sent to successful applicants during that time.

Most importantly, the requirement of registering for NEM is that the TNB bill be under the applicant’s name; and also not be blacklisted by TNB. So prospective applicant’s beware, if you’re blacklisted – be sure to clear your name/business before applying for NEM.

The offset ratio is at 1-to-1. Which effectively means, 1 credit = up to 0.51 cents per kilowatt hour(kWh) for domestic tariff. Of course, it is dependent on voltage supply(e.g. low/medium/high voltage supply).

Another way to word the offset is by; if i lived in a house with a new solar PV system installed and it generated and excess of 1 unit of energy during January. In February’s electricity bill, i will get charged less 1 unit of energy (due to the 1 unit of excess energy i generated in January).

So hypothetically, if my wife and i have a day job and are at the office working. Our solar PV system would be generating a lot of excess electricity the whole day due to no one utilizing electricity at home – say 50 units of excess energy. All 50 units of excess energy/credits will be minus’ed off in next month’s bill.

Net Energy Metering has no contract period. There is an application process however and a minimal application fee is applied for successful applicants.

Conclusion

NEM is a very attractive offer to not take up if you’re looking to get a solar PV system – be it for individuals or businesses. The extra minimal cost to apply for NEM vs the returns (easily over ~50% savings on your electricity bill) of NEM’s 1-to-1 offset ratio is just too good to pass up. This also future proofs yourself against any rise in electricity tariff rates. Foreseeing the attractiveness of NEM, the Ministry has imposed a quota in order to practice some moderation so that a sudden spike in NEM uptake won’t overload the electrical grid.

If you’re looking to understand more about NEM, feel free to ask us about it >

Here are some posts you may like…