What is Net-Energy Metering (NEM)?
NEM is the solar energy that generated from the “sunlight” by using solar PV system for own consumption purpose. Any excess solar energy will be exported to TNB grid and credit will be given to NEM consumers for 24 months consumption later. If the solar energy generated is not enough, then we can import the electricity from TNB grid. In this case, a bi-directional meter is needed to capture the energy usage and excess energy flow.
The Development of Renewable Energy and Net-Energy Metering in Malaysia.
Under the 8th Malaysia Plan (2000-2005), Malaysian Government has set an objective to diversified energy mix for electricity generation in Malaysia. In year 2000, Malaysian Government introduced The Fifth Fuel Policy, which Renewable Energy (RE) has been identified as Malaysia’s fifth fuel in addition to gas, oil, coal and hydro in electricity generation mixes. On 11th March 2001, Ministry of Energy, Green Technology and Water Malaysia (KeTTHA) announced the launching of the Small Renewable Energy Power (SREP) Program under the umbrella of Special Committee on Renewable Energy (SCORE) chaired by the minister for KeTTHA. The SREP program has provided access for renewable energy to the national utility grid with other fiscal package such as import duty and sales tax exemption, accelerated capital allowances for project investment, simplified licensing procedures by Suruhanjaya Tenaga (Energy Commission) and ‘pioneer status’ which waives the project investment from taxable income tax for up to five years.
Motivated by the SREP program and inspiration from the International Energy Agency Photovoltaic Power Systems Program’s (PVPS) that solar technology cost can be reduced significantly whenever there is a double growth of solar market, Malaysian government decided to focus on Building Integrated Photovoltaic (BIPV) technology application. The SREP program was expanded to include BIPV in 2003. Subsequently, the national ‘Malaysian BIPV (MBIPV) Project’ was launched on 25 July 2005 by the Minister of Energy. This initiative is designed to increase the uptake of solar technology and ultimately, realize solar potentials in Malaysia.
On 31st March 2006, the Malaysia Government announced the inclusion of MBIPV project into 9th Malaysia Plan (2006-2010) and the project received co-financings from the United Nation Development Programme/Global Environment Facility (UNDP/GEF) as well as the private sector. The objective was to create a sustainable solar market in Malaysia that will generate widespread solar applications, in addition to contributing towards the national energy policy objectives. Study done by MBIPV team indicated that the energy from BIPV installation could produce more than 12,000GWh of electricity per year (GEF, 2004). National utility, Tenaga Nasional Berhad (TNB) has agreed to allow grid connection of solar installations under the MBIPV project to its low voltage (LV) distribution network, and to adopt a “net-metering” concept for the accounting of solar generated electricity transferred to the national utility distribution network.
Strong support from national utility has made the MBIPV project overachieved its target. 2,055 kWp of photovoltaic capacity had been commissioned in August 2011. Importantly, the MBIPV project coupled with the SREP program led to the development of the Malaysia Renewable Energy and Action Plan which was approved in 2010 and incorporated into the 10th Malaysia Plan (2011 – 2015). This resulted in the 2011 passage of the Renewable Energy Act, which created a feed-in tariff mechanism and establishment of champion agency for renewable energy for Malaysia called Sustainable Energy Development Authority (SEDA). The feed-in tariff applies to indigenous renewable energy resources up to capacity of 30MW from biomass, biogas, small hydro and solar photovoltaic. The rate and duration of the feed-in tariff depending on type of technology applied and capacity of the power plant (KeTTHA, 2013). Take up rate for solar PV under Feed-in Tariff mechanism was overwhelming. Quota for 20MW Solar Photovoltaic for the first released by SEDA Malaysia in Jun 2013 taken up within hour (SEDA, 2013).
In August 2015, SEDA Malaysia has announced the introduction of net-energy metering (NEM) to address the overwhelming demand for solar PV. NEM allows self-consumption of electricity generated by solar PV system users, while selling the excess energy to utility company. It was suggested that the NEM quota for residential to be at 20 per cent, industrial sector (40 per cent) and the remaining for commercial buildings (SEDA, 2016).