Introduced in 2016, NEM is a program initiated by the Ministry of Energy, Green Technology and Water (“KeTTHA”) to allow solar photovoltaic system owners to generate, use and export the net excess energy to the grid. The NEM scheme was further improved in 2019 by the Ministry of Energy, Science, Technology, Environment and Climate Change (“MESTECC”) whereby solar photovoltaic system owners are able to sell the excess solar photovoltaic energy to the grid on one-to-one basis (“NEM 2.0”). The 500MW quota allocated under NEM 2.0 was fully taken up on 27 November 2020.

In view of the above, on 29 December 2020, the Ministry of Energy and Natural Resources (“KeTSA”) announced the introduction of NEM 3.0 which shall be implemented from 2021 until 2023. In essence, there are three (3) main initiatives introduced by KeTSA, namely:

• NEM Rakyat Programme;
• NEM GoMEn (Government Ministries and Entities) Programme; and
• NOVA (Net Offset Virtual Aggregation) Programme.

Details of NEM 3.0 are as below:

In addition, KeTSA has also made some improvements to NEM 2.0 whereby upon the expiry of the first 10 years in which the excess solar photovoltaic energy is sold on a “one-on-one” offset basis (“Initial Period”), the excess solar photovoltaic energy can be exported back to the grid at System Marginal Price for a further period of 10 years (“Extended Period”). Self-consumption model will apply upon the expiry of the Extended Period.

We anticipate that the relevant authorities will come out with the detailed guidelines in relation to NEM 3.0 in the near future. We will then provide the necessary updates in due course.