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About Net Energy Metering (NEM)

To continue to encourage the uptake of the Malaysia’s Renewable Energy (RE), the Ministry of Energy and Natural Resources (KeTSA) has announced the new NEM3.0 scheme in December 2020 to replace the previous NEM 2.0. The NEM3.0 comprises of three initiatives as below:

  • Program NEM Rakyat (Domestic)
  • Program NEM GoMEn (Government Ministries and Entities)
  • Program NOVA (Commercial & Industrial)

This scheme is regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the implementing agency. Unlike the previous NEM 2.0 where every kilowatt-hour (kWh) of excess energy was offset from energy bills at a “one-to-one” basis, the NEM 3.0 has a quota of 500MW that is available from 2021 till 2023. Find the key points of the scheme summarised in the table below:

What About NEM 2.0?

For companies who have registered their solar photovoltaic (PV) system under NEM 2.0, your business can still enjoy the offset rate of 1:1, where every 1kWh excess energy that’s exported to the grid will be offset against 1kWh consumed from the grid for a period of 10 years only. It shall then be switched to the NEM 3.0’s offset rate – System Marginal Price (SMP) for the next 10 years, and self-consumption (SelCo) mode after that.

NEM 2.0 had a quota allocation of up to 500 MW till the end of 2020, which was divided into the domestic and non-domestic sectors as the following:

  • Residential
  • Commercial
  • Industrial
  • Agricultural

This scheme is only applicable in Peninsular Malaysia and applicants must be registered as TNB customers.

How NEM Works

NEM allows users to benefit from solar PV energy. The solar energy generated will be consumed by your building first and the excess energy will be exported into the national grid to offset your TNB bill. For system owners under NEM 2.0, NEM Rakyat and NEM GoMEn, the excess energy will be recorded in credit form by a bi-directional meter and the energy credit will then be offset on a “one-on-one” basis per kWh unit. On the other hand, for system owners under Program Nova, the excess energy will be exported at the SMP.

Who is Eligible to Apply for NEM?

You can apply for this scheme if you are:

  • Eligible Consumer: One who is a consumer of the Distribution licensee who has not been blacklisted in its system for reasons such as not paying the electricity bill, committed an offence and more.
  • Registered Consumer of the Distribution Licensee in Peninsular Malaysia only.
  • Not a delinquent who has not paid their bills or a pending meter tampering case.
  • Subscribers of the following tariff:
    • Industrial
    • Commercial (Including government- owned structure)
    • Residential/ Domestic
    • Agricultural
  • Electricity shall only be generated from solar photovoltaic (PV). Other forms of renewable energy such as biogas, biomass or micro hydro may be allowed by the Commission on a case-by-case basis.

Source: Sustainable Energy Development Authority (SEDA) Malaysia
Disclaimer: The following information on this website was taken from announcements made by Malaysia’s Ministry of Energy and Natural Resources (KeTSA). This page will be updated in accordance with the official updates from KeTSA.

About Self-Consumption (SELCO)

How SELCO Works

When you install a solar PV system onto your own rooftop and fully utilize all the solar energy generated from it, it will be considered as SELCO in which any excess will not be exported to the grid, according to the guidelines of the Electricity Supply Act 1990.

The ministry encourages consumers in the residential, commercial and industrial sector to install solar PV for their self-consumption in order to reduce the overall energy consumption.

Under the Electricity Supply Act 1990, you can refer to the application guidelines for self-consumption:

  • Any person who uses, works or operates any solar PV generating facility for self consumption and indirect connection to the licensee distribution network in Peninsular Malaysia and Sabah
  • The relevant Distribution Licensee (DL) whose network is to relate to the self-consumption solar PV generating facility.

Source: Suruhanjaya Tenaga-Energy Commission


Large Scale Solar or known as LSS is a competitive bidding programme to drive down the Levelized Cost of Energy (LCOE) for the development of large scale solar (LSS) photovoltaic plant and Energy Commission is the implementing agency for this scheme.

How LSS Works

For individuals who are looking to develop a large-scale solar photovoltaic (PV) plant for connection to electricity networks will need to ensure their capacity is approved by the Energy Commission connected to either the Transmission Network or Distribution Network in Peninsular Malaysia, Sabah or Labuan.

Under Section 50C-The Electricity Supply Act 1990 (Act) [Act 447], the Energy Commission has issued the guidelines on large-scale solar PV plants for connection to electricity networks:

The Guidelines Apply to:

  • Any person who has been given the right by the Commission to develop large-scale solar power plant and seeking connection to the transmission and distribution electricity network with a capacity as reflected in the Request for Proposal (RFP) issued by the Commission.
  • The relevant licensee, whose network is to be connected with the Large-Scale Solar (LSS) power plant;
  • The Single Buyer or relevant distribution licensee who manage the contractual arrangement for the sale and purchase of electricity through the network; and Guidelines on Large Scale Solar Photovoltaic Plant for Connection to Electricity Networks GP/ST/No.1/2016 (Pin. 2020)
  • The grid system operator and distribution system operator.

These Guidelines are not applicable to large-scale solar power plants which have been given the right through Sustainable Energy Development Authority (SEDA) Malaysia to develop the plant under FiT scheme.


For those who are looking to bid for LSS4, the deadline has passed. However, if you are participating in the LSS program, here are the key principles of the LSS@MEnTARI framework by the Energy Commission:

  1. Local company which is a company incorporated in Malaysia under the Companies Act 2016 or under any corresponding previous written law, whereby such company:
    1. If not listed on Bursa Malaysia Berhad, shall have 100% Malaysian equity shareholding; and
    2. If listed on Bursa Malaysia Berhad, shall have at least 75% Malaysian equity shareholding.
  2. The plant capacity range for LSS power plant is divided into two capacity packages are as follows:
    1. Package P1: 10.00MWa.c. to less than 30.00MWa.c.
    2. Package P2: 30.00MWa.c. to 50.00MWa.c.
  3. The connection to the electricity network, (either the Transmission Network or Distribution Network), shall be based on technical criteria and evaluation through a comprehensive power system study.
  4. The Power Purchase Agreement (PPA) shall be based on take and pay, energy only under Build, Own and Operate (BOO) concession.
  5. A Bidder can submit up to three (3) LSS Plants for consideration, however, the aggregated Export Capacity of all the LSS Plants shall not be more than 50MWa.c.
  6. The PPA duration is 21 years with fixed energy prices throughout.
  7. The offers by the Shortlisted Bidders shall be based on the optimum output, final yield and specific yield of the proposed LSS power plant in accordance with the design and technology used.
  8. The LSS developer shall declare the plant’s energy production for 21 years. In the PPA, the LSS developer is entitled to be paid the Energy Rate up to the LSS power plant’s Maximum Annual Allowable Quantity (MAAQ).

Source: Suruhanjaya Tenaga-Energy Commission





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