NET ENERGY METERING (NEM)

NEM DEFINITION

Net metering is a utility resource usage and payment scheme in which a customer who generates their own power is compensated monetarily. Net metering originated with electric companies as a way to encourage consumers to invest in renewable energy sources such as solar or wind power. In a net metering program, the electric company allows a customer's meter to actually run backwards if the electricity the customer generates is more than they are consuming. At the end of the billing period, the customer only pays for their net consumption: the amount of resources consumed, minus the amount of resources generated.

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The Ministry has introduced few solar PV initiatives to encourage Malaysia’s Renewable Energy (RE) uptake. From the RE townhall held on 12th July 2018, one of the key issues highlighted by the PV industry is the need to change the concept of NEM from the existing net billing to true net energy metering. This is will help improve the return of investment of solar PV under the NEM.

 

Effective on 1st January 2019, the Net Energy Metering (NEM) will be improved by adopting the true net energy metering concept and this will allow excess solar PV generated energy to be exported back to the grid on a "one-on-one" offset basis. This means that every 1kWh exported to the grid will be offset against 1kWh consumed from the grid, instead of at the Displaced Cost previously.

 

The quota allocation for NEM is 500 MW up to year 2020. Quota allocation will be divided into domestic and non-domestic category. Agriculture will be a new category to be added to the NEM scheme. The NEM category has been divided into 4 categories which are Residential, Commercial, Industrial and Agriculture.

 

The new NEM scheme is only applicable to Peninsular Malaysia and applicants must be a registered TNB customers. NEM is executed by the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC), regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the implementing agency.

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