NET ENERGY METERING (NEM)

Sustainable Energy Development Authority (SEDA) has introduced solar PV initiatives to encourage Malaysia’s Energy (RE) uptake. PV industry has highlighted key issues during RE town hall on 12^th July 2018, the need of changes regarding the concept of NEM from the existing net billing to true net energy metering. This changes will help improve the return of investment of solar PV under NEM. Effective 1^st January 2019, NEM will improve by adopting the true net energy metering concept thus allowing excess solar PV generated energy to be exported back to the grid on a “one-on-one” offset basis, such as 1kWH exported to the grid will be offset against 1kWh consumption from the grid instead of the previous concept of Displaced Cost.

A 500 MW quota was allocated for NEM up to year 2020. Quota allocation will be divided into domestic and non-domestic category. NEM category divides into four categories which are Residential, Commercial, Industrial and Agriculture. A new NEM scheme will be only applicable in Peninsular Malaysia and registered TNB customers. NEM was executed by the Ministry of Energy and Natural Resources (KeTSA), regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the implementing agency.

Any energy produced by installed solar PV system will be consumed first while any excess energy will be exported back to TNB on “one-on-one” offset basis. This scheme is applicable to all domestic, commercial, industrial and agricultural sectors as long as they are registered customers with TNB. The PV systems are allowed to be installed on any available rooftops or car porches within their own premises.

Solar PV technologies installation requires minimal construction with high uptake rate compared to other RE technologies. Other than that, a factor driving such growth in the solar PV technology is the declining cost of PV system throughout its recent years. As solar PV technology proves to be more applicable to NEM scheme, it also allows the public to play an active role in mitigating climate change. Solar PV system generates clean energy, hence reducing the energy consumption and greenhouse effect.

This NEM scheme is ideally suitable to complement Feed-in-Tariff (FiT) and large scale solar schemes in achieving 20% of the national RE target in electrical mix. By enabling more solar PV applications, these efforts helps to reduce the dependency of imported fossil fuels.

Energy generated by NEM consumers will be consumed first before energy is imported from the utility grid. In many countries, NEM scheme is effective in countering fluctuation or increase in electrical tariff in the future. This is beneficial to customers who fall under high electrical tariff block.

Under NEM scheme, any access energy generated will be exported back to the utility grid and will be paid “one-on-one” offset basis. The priority of solar system is for benefits of self-energy consumption, however there are some industrial or manufacturing sectors which may not operate during the weekends or public holiday. Excess energy during these period will be exported back to the grid, credits shall be allowed to roll over for a maximum period of 24 months.

Maximum capacity:

Domestic or residential consumers, allowable maximum capacity of 12kWac for single phase system or 72kWac for 3 phase system.

Benefits of Outright Purchase:

• No Monthly Payment and Contract Period

• Enjoy Tax Inventive of 48%

• Reduce Electricity Consumption

• 3 Years Free Maintenance

A PPA is a long term agreement under which a business agrees to purchase electricity directly from a renewable source of energy generator. PPA provides financial certainty to you and the project developer, which removes a significant roadblock to building renewable energy facilities.

The developer sells the power generated to the customer at a discounted rate which is significantly lower than TNB tariff rate. This reduces the electricity cost from the customer purchasing from the main electrical grid. In doing so, the developer will receive the sales from the energy generate by the installed energy system.

PPA typically range from 15 to 25 years, the developer will remain responsible for operation and maintenance of the system for the duration of the agreement. Upon completion of PPA contract term, the system will belong to the host customer.

Benefits of PPA:

• Long term planning – Avoid long term commodity price risk and yield savings

• Sustainability – Achieve carbon reduction goals cost effectively

• Cost reduction – Reduced upfront cost, electricity savings up to 20%, protect against rising electrical cost

• Free maintenance

Owner of the system after 25 years contract.

Click here for more information about NEM NOVA.