PETALING JAYA: The net energy metering (NEM) programme which has driven the use of solar energy among households and businesses should be continued and expanded, say industry players.
This comes as the Energy Transition and Water Transformation Ministry announced it is reviewing NEM and considering its replacement after new power tariffs took effect this month.
NEM allows households and businesses to generate electricity from their solar photovoltaic systems, feed excess power into the national grid, and offset some of their own electricity costs.
The scheme is part of Malaysia’s policy to replace coal and fossil fuels with renewable sources such as solar and hydro.
“The NEM Rakyat programme should be sustained and extended to ensure long-term confidence among consumers and industry players,” said Malaysian Photovoltaic Renewable Energy Association (MPSEA) president Justin Sim.
NEM Rakyat is a version of the scheme aimed at promoting solar power to households.
Sim added that the NEM’s 1-for-1 offset mechanism should provide fair value for energy injected back into the grid while ensuring the scheme remains financially sustainable for the power system.
“A balanced approach rather than a full offset will help encourage renewable adoption, preserve consumer confidence, and maintain grid viability in the long term,” Sim said.
Under the current 1-for-1 mechanisms, one unit of energy injected into the grid offsets one unit consumed from the grid, according to the Sustainable Energy Development Authority.
The government should also reinstate or introduce a personal income tax relief scheme similar to Solaris to encourage more households to install solar PV systems, Sim added.
His call comes as solar system adoption has accelerated over the past two years, especially after the launch of the National Energy Transition Roadmap (NETR), according to MPSEA data.
From 2023 to mid-2025, data from the Energy Commission shows total installed solar PV capacity reached 5,284MW, up from 4,374.6MW in 2024.
“This is an increase of more than 900MW in just a year, driven by both utility-scale and distributed solar,” the association said.
For large-scale facilities, the LSS5 programme is allocating 2,000MW for commissioning by 2026.
This is complemented by floating and hybrid hydro-solar projects such as the 60MW Danau Tok Uban facility and TNB’s 30MW pilot at the Chenderoh dam.
Data from the Malaysian Investment Development Authority (Mida) showed that between 2024 and Q1 2025, renewable energy projects attracted RM3.24bil in investment across 1,255 projects, with solar being a major contributor.
As of July 2025, Malaysia’s installed solar PV capacity stands at 5,284MW, making it the largest contributor to the nation’s renewable energy mix.
This capacity could produce roughly 8.3 to 9.3 terawatt hours of clean electricity annually, according to MPSEA.
“In terms of employment, NETR Phase 1 flagship projects have already generated around 23,000 green jobs nationwide.
From 2024 to Q1 2025, renewable energy projects created 5,300 job opportunities,” the group said.
However, the industry continues to face hurdles.
“Upfront costs remain a deterrent for many households and SMEs, and while rebates and leasing models help, they do not fully bridge the gap.”
The government can speed up adoption by expanding financing support, fast-tracking permit issuance, investing in grid and storage infrastructure, and running sustained awareness campaigns, MPSEA said.
“Scaling up corporate renewable purchase schemes like CRESS (Corporate Renewable Energy Supply Scheme) and enabling cross-border green power trade under Enegem (Energy Exchange Malaysia) would also create more demand for solar.”
