Net Energy Metering (NEM) in Malaysia Explained

NEM is the mechanism that makes grid-tied solar work financially in Malaysia without needing a battery — but “you get credited for exporting power” only tells you the outcome, not how it actually functions. Here’s the mechanical version.

The bi-directional meter

A normal electricity meter only measures one direction: how much you pull from the grid. NEM requires TNB to install a bi-directional meter that separately tracks two flows — what you import (drawn from the grid when your system isn’t covering your usage) and what you export (surplus your system generates but your household doesn’t use in that moment).

This swap happens as part of your NEM application after your installer completes the system, not something you arrange separately. It’s one of the concrete reasons your installer needs to be SEDA-registered — the application process assumes it.

How the credit actually works

Every kWh you export is credited against your bill, but not at the same rate you’d pay to import — the export rate is lower. That asymmetry is the whole reason NEM sizing advice consistently comes back to the same point: a system sized to maximise self-consumption (using what you generate directly, rather than exporting and buying it back) outperforms a system sized purely to maximise export volume.

Credits are also generally settled within a billing cycle rather than banked forward indefinitely — check the current settlement terms with your installer or TNB directly, since specifics are periodically revised, but the practical implication doesn’t change: oversizing a system well past your own usage tends to leave value on the table rather than capture it.

What this means for sizing your system

In practice, this is why installers ask for 12 months of TNB bill history before recommending a system size. The goal isn’t the biggest system your roof can fit — it’s a system sized close to your household’s actual consumption pattern, so most of what it generates gets used directly rather than exported at the lower rate.

If you’re also considering a battery to capture more of that midday surplus for evening use instead of exporting it, see how that trade-off plays out under TNB’s Time-of-Use tariff.

Get your usage modelled by a SEDA-verified installer, or read the full incentives overview for how NEM fits alongside other solar incentives in Malaysia.