What is Net Energy Metering?
If you have been exploring solar energy in Malaysia, you have almost certainly come across the term Net Energy Metering, or NEM. For years, it was the go-to scheme that allowed homeowners and businesses to generate their own solar electricity and reduce their TNB bills in the process.
But NEM has officially ended. As of 30 June 2025, NEM 3.0 closed, and a new programme called Solar ATAP took over from January 2026. If you are wondering what NEM was, how it affected electricity bills, and what has replaced it, this guide covers everything you need to know.
What Is Net Energy Metering?
Net Energy Metering is a billing mechanism that allows solar panel owners to generate their own electricity, use what they need, and export any surplus back to the TNB grid. That exported energy is then used as a credit to offset the electricity they draw from the grid at other times, typically at night or on cloudy days.
The result is a lower net electricity bill each month. In straightforward terms, your solar panels produce during the day, and the credits from your exports help pay for what you use at night.
How Did NEM Work in Malaysia?
Malaysia first introduced NEM in 2016, with NEM 3.0 being the final and most popular iteration, launched in 2021 with a 500MW quota. Under NEM 3.0, the offset worked on a near 1-to-1 basis: for every unit of solar energy you exported to TNB, you received roughly one unit’s worth of credit on your bill. Unused credits could be carried forward for up to 12 months. Additionally, NEM 3.0 enforced a strict annual true-up where any unused accumulated credits were automatically reset to zero on January 1st every year.
The scheme was regulated by the Energy Commission (EC) and administered by SEDA Malaysia. It was open to residential, commercial, and industrial consumers, each with different capacity limits and application processes through TNB.
By May 2025, the residential NEM Rakyat quota had hit 99.8% capacity, effectively closing the door on new applicants ahead of the scheme’s official end date.
How Did NEM Impact Your Electricity Bill?
The impact on electricity bills under NEM was significant. Consumers with well-sized solar systems could reduce their monthly TNB bills by 50% to 100%, depending on their consumption patterns, system size, and how much of their solar energy they self-consumed versus exported.
Beyond the direct bill reduction, NEM also helped soften the impact of charges like the ICPT, which has since been replaced by the Automatic Fuel Adjustment (AFA) mechanism in 2026. By reducing the number of units purchased from TNB, solar owners under NEM paid less in fuel-linked surcharges as well. You can read more about how AFA now works on your TNB bill in our AFA vs ICPT guide.
Under NEM 3.0 also meant that consumers were not penalised for generating more than they used in any single month. This made system sizing more forgiving and gave homeowners flexibility.
NEM Has Ended. What Comes Next?
With NEM 3.0 officially closed as of 30 June 2025, the current programme for new solar applicants in Malaysia is Solar ATAP, which launched on 1 January 2026.
Solar ATAP retains the core concept of NEM where your solar panels generate electricity, you self-consume first, and any surplus is exported to TNB for bill credits. However, there are a few important changes to be aware of:
Credits reset monthly. Unlike NEM’s 24-month rollover, Solar ATAP credits expire at the end of each billing cycle. Any surplus not offset that month is forfeited. This makes right-sizing your solar system more important than ever.
Export rates differ by consumer type. Residential users receive export credits at retail-linked energy tariff rates of RM 0.27 per kWh for households consuming up to 1,500 kWh per month, or RM 0.37 per kWh for those above that threshold. Commercial and industrial users receive credits based on the System Marginal Price (SMP), a wholesale market rate that fluctuates in real time.
No quota limits. Unlike NEM which had fixed annual quotas that ran out quickly, Solar ATAP is open to all eligible TNB consumers year-round with no national cap.
10-year contract period. Solar ATAP agreements run for 10 years.
For a full breakdown of how Solar ATAP works, head over to our 2026 Solar ATAP Malaysia guide.
Is Solar Still Worth It Without NEM?
Yes, and in many cases Solar ATAP delivers strong savings, especially for households with high daytime electricity usage. The key difference is that self-consumption is now more valuable than exporting. The best strategy under Solar ATAP is to size your system correctly so that most of your solar generation is used immediately rather than exported at the lower SMP rate.
For homeowners looking to maximise their returns further, pairing solar with a Battery Energy Storage System (BESS) allows you to store excess daytime generation and use it in the evening when TNB rates apply. This reduces your reliance on the grid and protects you from AFA fluctuations. Learn more in our BESS guide for Malaysia.
For businesses, options like SELCO (Self-Consumption) and zero-CAPEX models such as PPA and CRESS are worth exploring alongside Solar ATAP, depending on your energy profile and capital situation. Our SELCO guide and zero-CAPEX solar comparison cover both in detail.
Conclusion
Net Energy Metering played a pivotal role in shaping solar adoption in Malaysia, giving hundreds of thousands of homes and businesses a financially compelling reason to go solar. While NEM has now ended, Solar ATAP carries that momentum forward with a more flexible and accessible framework for 2026 and beyond.
If you are considering solar for the first time or are an existing NEM user thinking about what comes next, the team at AQ Energy is here to help you make the right call for your home or business.
WhatsApp AQ Energy today for a free consultation and solar assessment.
Frequently Asked Questions (FAQs)
A. Is NEM still available in Malaysia in 2026?
No. NEM 3.0 has officially ended on 30 June 2025. For new solar applicants, Solar ATAP is now the active scheme, having launched on 1 January 2026. If you are already on a NEM contract, your existing agreement remains valid and continues under its original terms until it expires.
B. What is the difference between NEM and Solar ATAP?
Both schemes allow you to export surplus solar energy to TNB for bill credits. The key differences are that NEM offered near 1-to-1 credit offset with a 24-month rollover, while Solar ATAP credits reset monthly with no rollover. Solar ATAP also uses retail rates for residential export credits and SMP-based pricing for commercial users, compared to NEM’s simpler offset model. Solar ATAP also has no fixed national quota, making it accessible to more applicants.
C. How much can solar panels reduce my TNB bill under Solar ATAP?
Savings depend on your system size, energy consumption pattern, and how much of your solar generation you self-consume. Residential users who maximise daytime self-consumption and export surplus at RM 0.27 to RM 0.37 per kWh can still achieve meaningful monthly savings. The best results come from right-sizing your system to your actual daytime usage rather than oversizing for maximum export.
