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NEM FAQs

Common NEM FAQs

1. What is Net Energy Metering or NEM 3.0?

The Net Energy Metering project was introduced in the year 2016 to increase the number of solar PV installations and encourage the use of solar energy resources. The NEM 2.0 iteration was introduced in 2019 using the “one-is-to-one” offset arrangement for excess energy generated from the installed solar management system but unconsumed within premises.

The most current version of Net Energy Metering is NEM 3.0, which has the following classifications:

  • NEM Rakyat
  • NEM GoMEn (Government Ministries and Entities)
  • NEM Nova

2. What details and features are unique with NEM 3.0?

With the various classifications under NEM 3.0, the following quotas and implementation terms apply:

ProgrammeQuota AllocationPeriod
NEM Rakyat100 MWFebruary 1, 2021 to December 31, 2023
NEM GoMEn100 MWFebruary 1, 2021 to December 31, 2023
NEM Nova300 MWApril 1, 2021 to December 31, 2023

3. How do I apply for NEM 3.0?

Those who are applying for the programmes of NEM Rakyat, NEM GoMEn, and NEM Nova may create their applications through the eNEM portal of SEDA: https://services.seda.gov.my/nem/auth/login

For NEM application submissions, the NEM applicant is instructed to appoint the Registered PV Service Provider (RPVSP) of SEDA.

4. Upon approval, is it required for the PV installation to be started immediately?

Any applicant is required to proceed with the solar PV installation within a period of three (3) months from NEM approval date. If the applicant fails to install the solar power system within the stipulated period, approval shall face cancellation, without any provision for refund.

5. Does NEM provide incentives to us as NEM consumers?

The Malaysia Investment Development Authority (MIDA) has put forward the “Green Technology Incentive” whereby companies that fit the required qualifications may apply for fiscal incentives. For more comprehensive guidelines and relevant forms, see here: https://www.mida.gov.my/forms-and-guidelines/tax-incentives-for-green-industry/

6. Is there a specific meter required for NEM 3.0 (NEM Rakyat, NEM GoMEn, and NEM Nova)?

Yes, the following meter types are required and applicable:

  • Bi-directional – this type of meter tracks and measures the electricity supply to the NOVA consumer from the Distribution Licensee. It also measures the energy exported to the Supply System from the NOVA subscriber. The Distribution Licensee shall be responsible for the bi-directional meter’s installation.
  • PV Meter – the PV meter is used in computing the energy generated by the solar PV installation. It is the NOVA consumer who will be installing and managing this meter type.

7. Does the Energy Commission have a list of qualified electrical professionals whom I can hire?

Yes, there are qualified and affiliated professionals you can hire. To view the list of these personnel, head on over to the Energy Commission (EC) website at: https://ecos.st.gov.my/ms/senarai-orang-kompeten-berdaftar-elektrik-

NEM Rakyat and GoMEn FAQs:

1. What qualifications are needed for a NEM Rakyat or NEM GoMEn application?

Under NEM guidelines for Rakyat and GoMEn, the following may be eligible to apply:

  1. Consumers already registered with the Tenaga Nasional Malaysia (TNB) or individuals applying to be a consumer of TNB in Peninsular Malaysia.
  2. An applicant with no previously-installed solar PV system under the preceding solar PV initiative.
  3. An applicant that qualifies by meeting these specific category-based criteria:

NEM Rakyat (Domestic tariff): a domestic subscriber whose private residence or premises is not being utilised as a hotel accommodation, boarding house, or being used for any kind of business operation or for the conveyance of professional service/s.

NEM GoMEn (Commercial tariff): a government-initiated department or ministry operating at different administrative levels, from state and federal, to district and local.

2. What is the required installation type for NEM Rakyat or NEM GoMEn?

The approved or permissible type of installation for solar PV systems is one that is mounted on the building rooftop within the same premises as the NEM Rakyat or GoMEn subscriber.

3. Which maximum capacity limits are applicable for each application?

Maximum capacity limits for both NEM Rakyat and NEM GoMEn are different, with specifications listed below:

NEM Rakyat:

Single phase: no greater than 4kW

Three phase: no greater than 10 kW

NEM GoMEn:

For NEM GoMEn subscribers, PV installations should not have a capacity of more than 1,000 kW. Furthermore, the following conditions apply:

Medium-voltage subscribers – no more than 75% of Maximum Demand; with Maximum Demand computed as follows:

  • The previous year’s average Maximum Demand
  • For consumers operating for less than a year, the declared Maximum Demand

Low-voltage subscribers – no more than 60% direct-meter fuse rating, or 60% of current transformer (CT) rating

4. Is there a cash-out arrangement available for excess energy generated through the solar PV installation?

No, there will be no cash-out arrangement With the NEM Rakyat and NEM GoMEn Programmes. In the event of surplus energy generated but not consumed within premises, such excess energy may be exportable to Distribution System. The offsetting of the electricity bill will be done on the appropriate Billing Period, with the offset credit amount based on the excess energy value. Net credit may continue for no more than twelve (12) months, after which excess energy will be forfeited.

5. Are NEM NOVA applicants required to undergo or conduct NEMAS?

The NEMAS study was created to ascertain the technical impact of NEM to the TNB electricity distribution network, and for it to identify the necessary technical steps for its safe application whether during or after installation.

NEM consumers who plan to install solar PV systems greater than 72 kW in capacity must connect with TNB or other partners associated with the Energy Commission to carry out NEMAS.

 NEMAS requirement and corresponding fees vary according to capacity. To determine such fees, or whether NEMAS is required, the following specifics are helpful:

Installation capacities (in kW)NEMAS necessary?TNB fees
> 425 kW– 1 mWYesRM 8,000
>180 kW – 425 kWYesRM 5,000
>72 kW – 180 kWYesRM 1,000
1 kW – 72 kWNoN/A

6. When applying for NEM, what information and other requirements are needed?

Information-related requirements:

  1. Profile of the applicant
  2. Project information
  3. Technical information
  4. Work-plan proposal

 Documentary requirements:

  1. Specific engineering design (recommended by a professional)
  2. Past 3 months electricity billing/ TNB invoice
  3. For 72 kW and above, NEMAS approval and attached report
  4. Site ownership documents

NEM Nova FAQs

1. What is NEM Nova?

NEM Nova is one of the categories of NEM 3.0. NOVA is acronym for Net Offset Virtual Aggregation.

The NOVA Programme works through a solar PV installation wherein any energy generated through the installed system must be consumed within the designated premises of the NOVA consumer.

Should there be any excess energy not consumed within premises, however, this may be transported back to the Supply System. The process may be done under either of these categories:

  • Category A: Excess energy generated by the solar PV system but unconsumed by NOVA subscriber may be channeled to the Distribution Licensee through the Supply System, the value of which will be used as credit to the NOVA consumer’s account for the offsetting of bill payment for the next period.
  •  Category B: Any excess, unconsumed energy produced within a month may be exportable to a maximum of three Designated Premises, the value of which will be added to the account of the Designated Premise as offset for billing payment for the next period.

2. For a NEM Nova application, what installation type may be considered eligible?

Eligible installation types are roof-mounted solar PV systems on buildings within the same designated premises.

3. Is there a maximum capacity limit for each application? If so, then how much?

Each category comes with its own PV installation maximum capacity limits. The limit will be dictated according to the Nova Consumer’s Maximum Demand.

Category A

Under Category A, Nova Consumers or subscribers are allowed to install no more than 1,000 kW for the net offset arrangement, with the following conditions in place:

  • The solar PV installation’s inverter output must have a maximum capacity of 75% of the Nova Consumer’s Maximum Demand, as stated under the NOVA contract.
  • The Nova Consumer’s Maximum Demand is calculated via:
    • Average amount of Maximum Demand posted for the previous 12 months.
    • For NOVA consumers with fewer than 12 months on record postings, the average of the recorded Maximum Demand applies.
    • Maximum capacity limit for low-voltage subscribers is 60% of fuse rating (applicable for direct meter) or 60% of current transformer (CT) rating.

Category B

Under Category B, NOVA consumers are not permitted to go beyond 5,000 kW for the net offset arrangement, with the applicable conditions stated below:

  • The solar PV installation’s inverter output must have a maximum capacity of 75% of the Nova Consumer’s Maximum Demand, as stated under the NOVA contract.
  • The Nova Consumer’s Maximum Demand is calculated via:
    • Average computation for Maximum Demand posted for the preceding twelve months.
    • For NOVA subscribers with fewer than twelve months on record, the declared Maximum Demand shall apply.
  • Maximum capacity limit is at 60% for fuse rating and 60% of current transformer rating. This applies to Low Voltage consumers.

4. Is there a cash-out arrangement allowed for excess energy generated in the premises?

Under NEM Nova, no cash-out arrangement is currently in place. For excess energy generated within the NEM Nova designated premise that has not been consumed, this may be channeled to the Supply System. Either of the two categories applies:

  • Category A: Any excess, unconsumed energy produced within a month may be exportable to the Distribution Licensee through the Supply System, the value of which will be credited to the account of the NOVA subscriber as offset for billing payment for the next period.
  •  Category B: Any excess, unconsumed energy produced within a month may be exportable to a maximum of three Designated Premises, the value of which will be added to the account of the Designated Premise as offset for billing payment for the next period.

5. How is the System Marginal Price (SMP) computed?

The definition of System Marginal Price (SMP) is as follows:  “The price of the most expensive marginal generator included in the Draft Day Ahead Dispatch Schedule to meet the Day Ahead Load Forecast in a Half-Hour Period or the Week Ahead Dispatch schedule to meet the Week Ahead Load Forecast.”

As for Average SMP, this refers to the system marginal price on a monthly average, specifically for the period of 7:00 hour to 19:00 on a daily basis for the previous calendar month. The Average SMP will form the credit to be given to the NOVA subscriber.

The following calculation shall determine the energy net offset amount, instead of the offset on minimum monthly recurring charges as determined in the Distribution Licensee’s tariff category:

Net Energy charge (RM) = (Energy imported from Supply System* x prevailing gazetted Energy rate) – (Energy export to Supply System x Average SMP)

*where relevant, imported energy is subjected to SST, KWTBB, and ICPT

Exported excess energy in Designated Premise will be added to their account through priority arrangement made by NOVA consumer.

For Single Buyers, average SMP of the past month must be published on website before the 14th day of the month is over.

6. Which information and documents are needed for a NEM application?

The following information and documentary requirements are needed for a NEM application:

 Information-related:  

  1. Applicant’s profile
  2. General project information
  3. Technical information
  4. Proposed work plan

Documentary requirements:

  1. Professionally-endorsed, specific and detailed engineering design
  2. TNB invoice or electricity bill for past 3 months
  3. For above 72 kW capacities, a Connection Assessment Study or CAS approval
  4. Documentary proof of site ownership

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NEM FAQs

Net Energy Metering is a solar incentive project of Sustainable Energy Development Authority (SEDA) Malaysia. The government first introduced it in 2016, and was slated to run until 2020 with a quota allocation of 500MW. Since its first introduction in 2016, the net energy metering initiative has undergone various phases or iterations, with the NEM 3.0 being the most recent in 2021.

What is net energy metering and why is it important?

Essentially, the Net Energy Metering scheme was introduced by the Malaysian government to promote the use of renewable energy resources, specifically solar PV installations, within domestic, commercial, and industrial settings. The governing entities of the initiative are the following: SEDA, KeTSA or the Ministry of Energy and Natural Resources, and EC or the Energy Commission.

What is the NEM Tariff Malaysia arrangement?

Under the NEM concept first introduced in 2016, the arrangement was that after the solar energy from the installed system has been consumed, the excess will then be exported to the Tenaga Nasional Berhad (TNB) at the normal displaced cost.

Beginning in 2019, with the adoption of NEM 2.0, the 1:1 offset arrangement became the prevailing agreement for excess energy generated but not consumed within the premises. By December 2020, the original quota allocation for NEM at 500 MW, which was later taken up by NEM 2.0 as well, was fully consumed by subscription. This gave birth to the NEM 3.0 initiative.

To continue promoting the use of solar PV systems as means for a renewable energy source, the NEM 3.0 was introduced after the full subscription of the NEM 2.0 initiative on December 2020. The NEM 3.0 is designed to run from 2021 to 2023. Unlike the previous two iterations of NEM, NEM 3.0 is categorised into three different sub-programs.

What are the various NEM 3.0 Options?

Currently, the NEM 3.0 TNB is divided into three different categories, which aim to cater to different consumers and entities.  

  •  NEM Rakyat (for domestic subscription)
  •  NEM GoMen (Government ministries and entities)
  •  NEM NOVA (Net Offset Virtual Aggregation)