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Unlocking the Benefits of Net Energy Metering (NEM) in Malaysia: What You Need to Know

Net Energy Metering (NEM) is a program that allows consumers who generate their own electricity using renewable energy sources to receive credits on their utility bills for excess energy they produce and send back to the grid. The NEM program was first introduced in Malaysia in 2016 and has since seen increasing adoption, particularly in the residential sector.

The future of NEM in Malaysia is uncertain, as there have been several developments and changes to the program in recent years. In 2020, the Malaysian government announced the implementation of the Net Energy Metering 3.0 program, which would introduce new rules and regulations for solar PV system owners.

Under NEM 3.0, solar PV system owners would receive lower compensation rates for excess energy generated and sent back to the grid, which is based on the Value of Distributed Energy Resources (VDER). The VDER takes into account the actual costs and benefits of generating and distributing renewable energy, such as the avoided costs of fuel, emissions, and transmission upgrades.

In addition, solar PV system owners may be required to pay a monthly grid access fee or demand charge to cover the costs of maintaining the grid infrastructure, which they still rely on for backup power and grid services. These changes are expected to take effect in the coming years, although the timeline and implementation details are still being finalized.

Despite these changes, the outlook for NEM in Malaysia remains positive. The Malaysian government has set a target of achieving 20% renewable energy generation by 2025, which includes a target of 1,000 MW of solar PV installations. The NEM program is seen as an important incentive for achieving these targets, as it can encourage more households and businesses to adopt solar PV systems and generate their own electricity.

Overall, the future of NEM in Malaysia depends on several factors, including government policy, market demand, and technological advancements. However, with the growing interest in renewable energy and the potential benefits of NEM, it is likely that the program will continue to play an important role in the Malaysian energy landscape in the coming years.

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