Net Energy Metering 3.0 (NEM 3.0) was the framework that governed how Malaysian solar owners were compensated for electricity they generated, before it closed to new applications at the end of June 2025. Unlike its predecessors, NEM 3.0 prioritised self-consumption over grid export — a design that rewarded owners who used solar power directly in their homes or businesses rather than selling it to TNB. Solar ATAP is the current programme, replacing NEM 3.0 from 1 January 2026. This guide explains exactly how NEM 3.0 worked, its application process, and the savings it delivered — useful if you're researching the scheme's history or are still on a legacy NEM contract.
What is Net Energy Metering (NEM)?
Net Energy Metering is a billing arrangement between solar system owners and Tenaga Nasional Berhad (TNB) that allows excess solar electricity to be credited against your TNB bill. Instead of having two separate transactions (you pay TNB for grid power, TNB pays you for exported solar), NEM nets the two against each other on a single bill.
The Three NEM Generations in Malaysia
| Programme | Period | Mechanism | Export Rate |
|---|---|---|---|
| NEM 1.0 | 2016–2019 | 1-to-1 offset: exported kWh cancels imported kWh at same tariff rate | Same as import tariff |
| NEM 2.0 | 2019–2023 | Displaced Cost approach: export credited at Displaced Cost Rate (lower than import) | Displaced Cost Rate (lower than the import tariff) |
| NEM 3.0 (closed) | 2024–June 2025 | Self-consumption first: system sized to self-consume 80%+; export credited at Displaced Cost Rate | Displaced Cost Rate (fixed) |
How NEM 3.0 Works: The Self-Consumption Model
The key philosophical shift in NEM 3.0 was the sizing guideline. SEDA and TNB required that systems be sized to self-consume the majority of their generation — meaning the solar system should be sized to match your consumption, not to maximise export. Solar ATAP, the current programme, follows the same self-consumption-first logic, but goes further by forfeiting unused export credits at the end of each billing period instead of letting them roll forward.
The NEM 3.0 Billing Mechanism Step by Step
- Solar generates during daylight hours. Your panels produce DC electricity, converted to AC by the inverter.
- Self-consumption happens first. Any electricity your home/business is consuming at that moment is powered by solar — the grid meter does not spin.
- Surplus is exported to TNB. When generation exceeds instantaneous consumption (midday, when appliances are off), excess flows to the grid. Your bi-directional meter records this.
- At night or on cloudy days, you draw from the grid. Your meter records TNB imports normally.
- Monthly bill calculation: TNB imports are charged at your normal tariff. Exports are credited at the NEM export rate. The credit is applied against your bill — if credits exceed your bill, they carry forward (but are not paid out as cash).
The Critical Difference: Why Exports Earn Less
Under Solar ATAP today, power exported by a home is credited at the Energy Charge only: RM 0.2703/kWh (RM 0.3703 above 1,500 kWh a month). Solar used at home avoids the Energy, Capacity and Network charges: RM 0.4443/kWh (RM 0.5443 above 1,500 kWh a month). So every kWh you self-consume is worth about 1.6 times a kWh you export. NEM 3.0 was explicitly designed to encourage self-consumption behaviour, and Solar ATAP carries the same logic forward today, with the added consequence that unused export credits are forfeited at the end of each billing period rather than rolled forward.
Implication: Oversizing your solar system so it exports large amounts is financially inefficient under Solar ATAP. Size to self-consume. Use our solar savings calculator to find the optimal system size for your bill.
NEM 3.0 vs SELCO vs NOVA: Understanding the Full Landscape (Historical)
This is how the landscape was structured while NEM 3.0 was open. NEM 3.0 closed to new applications in June 2025, and since 1 January 2026 Solar ATAP has taken its place and is the current programme; NEM 3.0 is closed and NEM NOVA is no longer available.
| Programme | Best For | System Size Limit | Export Arrangement |
|---|---|---|---|
| NEM 3.0 (closed) | Residential and SME wanting bill offset | Up to 75% of approved TNB load | Credit against bill at the Displaced Cost Rate |
| SELCO (Self-Consumption) | Owners who use all their solar on site | Sized to on-site load | No export — self-consumption only |
| NEM NOVA (closed) | No longer available | — | Closed to new applications |
For residential and SME applications below 1 MW, NEM 3.0 was the standard framework before it closed in June 2025 — Solar ATAP is now the standard framework for that segment. NEM NOVA is no longer available. Businesses that use all their solar on site can consider SELCO (no export), and non-domestic premises can apply under Solar ATAP for up to 1,000 kWac.
NEM 3.0 Application Process: Step by Step (Historical Reference)
SEDA is no longer accepting new NEM 3.0 applications — this section is kept for reference and for homeowners tracing an existing NEM contract. If you're applying today, you'll go through the equivalent Solar ATAP process instead. The NEM 3.0 process involved both SEDA (Sustainable Energy Development Authority) and TNB, and took 6–12 weeks from submission to approval:
Step 1: Engage a SEDA-Registered Installer (Your Installer Handles Most of This)
Only SEDA-registered solar contractors can submit NEM applications on your behalf. This is a mandatory requirement — non-registered contractors cannot legally connect a solar system to the TNB grid. Trexon Energy is a registered SEDA contractor.
Step 2: Technical Assessment and System Design
Your installer conducts a site survey, designs the system, and prepares the Single Line Diagram (SLD) and other technical documentation required for submission. System size must not exceed 75% of your approved TNB load (or 12 kW for standard residential single-phase, whichever is lower for Tariff A).
Step 3: SEDA Registration (Online)
Your installer submits the NEM application via SEDA's online portal (nem.seda.gov.my). Documents required: TNB bill, property ownership proof, installer registration number, system design documents. SEDA processing: 2–4 weeks for approval letter.
Step 4: TNB Grid Connection Application
With SEDA approval in hand, your installer applies to TNB for grid connection approval (GCA). TNB inspects the proposed connection point, confirms meter compatibility, and issues a Connection Agreement. TNB processing: 3–6 weeks.
Step 5: Installation
Installation typically takes 1–3 days for residential systems. Your installer handles all electrical work to Energy Commission (Suruhanjaya Tenaga) standards.
Step 6: TNB Inspection and Meter Installation
TNB sends a qualified officer to inspect the completed installation against the approved SLD and install the bi-directional (import/export) meter. This appointment takes 1–3 weeks to schedule after installation completion.
Step 7: Commissioning and SEDA Notification
Once TNB confirms the meter is operational, your installer notifies SEDA of commissioning. Your 21-year NEM approval period begins from this date.
Savings Calculation: RM 300 Bill to About RM 116 (Solar ATAP)
This is the calculation most homeowners want to see, run on today's Solar ATAP rules and the RP4 tariff. Estimate on the RP4 domestic tariff (from 1 Jul 2025), before AFA, the 1.6% RE Fund and service tax; 3.5 sun-hours a day; about 40% of solar used at home and the rest exported and credited at the 27.03 sen Energy Charge (capped at what you import) for 10 years under Solar ATAP; no tariff increases. Your bill and roof will change the figures.
Household Profile
- Monthly TNB bill: RM 300
- Monthly consumption: approximately 739 kWh
- Recommended system: 5.58 kWp (our smallest catalogue size; there is no 4 kW package)
- System cost: RM 15,999 (Solis)
Monthly Energy Flow
- Solar generation: about 586 kWh/month (5.58 kWp x 105 kWh/kWp/month)
- Self-consumed solar: about 234 kWh (offset against TNB imports)
- Exported to grid: about 352 kWh (credited at RM 0.2703/kWh = about RM 95)
Bill Calculation
- Bill before solar: RM 300
- Export credit earned: about RM 95
- Net bill after solar: about RM 116
- Monthly savings: about RM 184 (about 61% bill reduction)
Annual savings are about RM 2,208. Actual results vary with weather and with how much you use during the day.
On a RM 15,999 system with about RM 2,208 a year in savings, payback is approximately 7.2 years. Check our complete solar panel price breakdown for Malaysia 2026 for detailed cost analysis by system size.
Common NEM 3.0 Misconceptions
- "My unused export credits will be paid out at year-end." No. Unused NEM 3.0 credits were never paid out as cash, and under Solar ATAP unused credit is forfeited at the end of each billing period. Understanding the ATAP credit reset in detail helps you size your system correctly and avoid losing credits. This is why sizing correctly to self-consume is critical.
- "I can install any size system I want." No. NEM 3.0 system size is capped at 75% of your TNB approved load. Exceeding this required special approval or a different programme (such as SELCO, with no export).
- "My solar panels stop working during a TNB outage." Correct for standard grid-tied systems — this is a mandatory safety requirement (anti-islanding protection). A battery backup system is required if you want power during blackouts.
- "I need to re-apply if I move house." Partly true. NEM approval is property-specific, so it does not move with you to a new home. If you sell your property, the NEM approval and remaining quota transfers to the new owner with the property.
Ready to go solar under Solar ATAP, the current programme? Our team manages the entire SEDA and TNB process on your behalf. Get in touch with Trexon or use our solar savings calculator to estimate your personalised savings before committing.
Frequently Asked Questions
How long did the NEM 3.0 application take in Malaysia?
NEM 3.0 closed to new applications in June 2025, so this timeline is historical — new applicants now go through Solar ATAP instead. From initial application submission to TNB meter installation: 6–12 weeks. SEDA processing was typically 2–4 weeks, TNB grid connection approval 3–6 weeks, and meter installation scheduling 1–3 weeks after installation completion. Your registered installer manages the entire process — you only need to sign documents at key stages.
What was the maximum solar system size under NEM 3.0?
For residential Tariff A customers, the cap was 12 kW (single-phase) or 75% of your approved TNB load, whichever was lower. Commercial customers could go up to 75% of approved load with no absolute kW cap. Systems larger than these limits required a different programme, such as SELCO (self-consumption, no export). Note that Sarawak operates under SEB (not TNB) — the Sarawak NEM programme has distinct rules, its own capacity caps and a state subsidy of RM8,000 to RM12,000, worth reviewing if your property is in East Malaysia.
Can I claim Solar ATAP and the GITA tax incentive at the same time?
Yes. Solar ATAP (like NEM 3.0 before it) is a billing arrangement with TNB, while GITA (Green Investment Tax Allowance) is a separate tax incentive administered by MGTC (Malaysian Green Technology and Climate Change Corporation), applicable to companies (Sdn Bhd) investing in solar. Residential homeowners are not eligible for GITA. Both incentives can be claimed simultaneously by eligible business entities.
