NEM FAQs

Net Energy Metering (NEM) Eligibility, Installation Types and Capacity Limit

All registered consumers who are in good standing with a distribution licensee of Tenaga Nasional Berhad (in Peninsular Malaysia) or Sabah Electricity Sdn. Bhd. (in Sabah and Labuan) are eligible for the NEM mechanism. Consumers can participate in this scheme under the domestic/residential, commercial or industrial categories – provided that they rely on Solar Photovoltaic for their source of solar power. The solar PV system can be installed on the rooftops of homes, office buildings, garages, car parks or any similar building.

Domestic/residential consumers should install a PV system that generates less than 12kWp (single phase) or 72 kWp (3 phases). On the other hand, commercial and industrial consumers should install a PV system with a maximum capacity of either 1 MWp, 75% of maximum demand, 60% of fuse rating, or 60% of the transformer that is presently used (whichever criteria is lowest).

NEM Connection Type

Under the NEM, the consumer’s PV system will not be directly connected to a distribution licensee (i.e. TNB or SESB). The PV system will be connected to the consumer’s internal distribution board, which is connected to the power grid. Consumers will have to install an NEM Import-Export Meter at their own cost, which will record the amount of electricity that flows into the house, and from the PV system into the grid.

 Excess Energy Calculation

Any additional electricity that is contributed to the grid can be used to offset the consumer’s electricity bill, based on current Displaced Cost rate. The following formula will be used to determine the consumer’s net billing:

Net billing = [Energy Consumed from DL (kWh) x Gazetted Tariff] – [Energy Exported to DL (kWh) x Displaced Cost]

Any positive net billing (i.e. credit) can roll over into the following month for up to 24 months (credits that still exist after this period will be renounced).

NEM Assessment Study

Consumers who are interested in participating in the NEM scheme with a PV system that generates more than 12 kWp will have to undergo a NEM Assessment Study (NEMAS) study before submitting an application to the Sustainable Energy Development Authority (SEDA Malaysia).

The fees for the study, which will be conducted by the relevant distribution licensee (i.e. TNB or SESB), will have to be borne by the consumer: RM 1,000 for 12 kWp – 180 kWp; RM 5,000 for 180 kWp – 425 kWp, and RM 8,000 for 425 kWp – 1 MWp.