The revolution of green technology in Malaysia has been developing since the establishment of the Ministry of Energy, Green Technology and Water (KeTTHA) on April 9, 2009.  With the vision to be the industry leader in the sustainable development in clean energy product and services, the government has introduced multiple programs and policies to support our nation towards green technology. This has also become one of our country’s leading agenda in addressing the global environmental issues.

Over the years, our government has initiated a few solar PV programmes for grid-connected solar PV facilities to promote clean energy. Let’s have a quick understanding on how our government has been supporting the nation to ride on green technology.

FiT: FiT programme obliges the distribution licensees, including TNB and Sabah Electricity Sdn Bhd, to buy electricity generated from renewable resources produced by Feed-in approval holders (FiAH) at a pre-determined rate for a specific duration which are typically for 21 years.

Renewable resources eligible for FiT programme are solar PV, biogas, biomass and small hydropower. Under this programme, no new quota has been allocated for solar PV since 2017 except 5.00 MW under the community category including schools, care centres and places of worship. In 2017, the quota that was allocated by SEDA under the community category was the last quota offered. There was no additional quota offered under the FiT programme for solar PV facilities since 2017.

NEM: NEM programme allows consumers to generate solar PV electricity for self-consumption and export any excess electricity to the power grid at prevailing displaced cost.

NEM 2.0
In January 2019, the NEM programme was enhanced to NEM 2.0. The NEM 2.0 allows excess solar PV electricity to be exported to the power grid on a one-on-one (1-on-1) offset basis by off-setting every 1.00 kWh exported with 1.00 kWh consumed from the grid.

NEM 3.0
In December 2020, the NEM 3.0 was introduced which allow excess solar PV electricity to be exported and used to offset the subsequent bill payment. The offset of the electricity bill is applicable for the first 10 years. After the 10 years electricity offset period, the solar PV electricity generated will be for self-consumption only and offsetting of the electricity bill or export of excess electricity will not be permitted. As of 28 February 2022, the solar PV quota available for allocation under the NEM 3.0 programme is approximately 407 MWac up to 2023. The NEM 3.0 programme is categorised into the following:

SELCO: SELCO programme involves the installation of solar PV facilities for consumer’s own use. Unlike NEM, any excess electricity generated under SELCO is not allowed to be exported to the power grid. Quota is not applicable under the SELCO programme, however solar PV installations of 72kW or more are required to apply for a licence from the Energy Commission Malaysia.

LSS: The LSS programme in Malaysia is a programme initiated by the Energy Commission for utility grid connected solar PV plants with a generation capacity of 1.00 MWac or more. The contract for the development of the LSS PV plant project was based on competitive bidding and the awarded bidder will be responsible to build, own, operate and generate electricity for sale to the distribution licensee namely TNB or Sabah Electricity Sdn Bhd for 21 years under a PPA arrangement.

NEDA: NEDA is a programme which allows an entity involved in power generation to sell power to a single buyer such as TNB. Under the NEDA programme, power generators are llowed to submit bids for their variable costs such as fuel, operations and maintenance costs on a daily basis to compete for more power generation supply. For the Financial Years Under Review and up to the LPD, we have 1 on-going EPCC of solar PV facility projects under the NEDA programme.

If you would like to find out more on Government’s incentive, speak to our account manager today!