What is net energy metering (NEM)?

Malaysia's net energy metering scheme, administered by the Sustainable Energy Development Authority (SEDA), permits residential and small commercial solar panel owners to feed surplus electricity into the Tenaga Nasional Berhad (TNB) grid. When a solar installation produces more power than the building consumes, the excess is exported to the network and credited on the owner's TNB bill at the same rate as the electricity purchased from the grid.

NEM works on a monthly netting basis. The grid acts as a virtual battery, storing surplus energy during high-production periods (typically mid-morning and early afternoon) and allowing the owner to draw power during evening and night hours without additional charge. At the end of each billing cycle, TNB calculates the net consumption, and the owner pays only for the difference between total energy imported and exported.

The scheme reduces electricity costs for solar owners and encourages distributed renewable energy generation across the country. It eliminates the need for expensive battery storage systems for many households, making solar more economically viable. However, net metering does not provide payment for surplus energy exported; it functions purely as an offset mechanism. Installation and maintenance of compliant solar systems require certified solar installers and ongoing coordination with TNB for grid connection approval and monitoring.