Additional 300MW Solar Quota for Malaysia’s Net Energy Metering Programme

On 22 October 2021, the Ministry of Energy and Natural Resources (‘KETSA’) announced that the Malaysian Government will be releasing an additional quota of 300MW of solar energy for the country’s Net Energy Metering 3.0 Programme.1 Such additional quota will be in relation to the NEM NOVA initiative, which is open to non-domestic consumers in the commercial, industrial, mining and agriculture industries. Our earlier Alert on the NEM NOVA initiative and its features can be accessed here.
The decision to release the additional quota was announced simultaneously with the announcement of the Malaysian Government’s decision to allow only non-renewable energy to be exported to Singapore as part of the country’s cross-border sales of electricity.2 According to KETSA, the restriction on the export of renewable energy will assist Malaysia to attain its climate aspiration and allow Malaysian renewable energy players to benefit from the additional solar quota.
Applications for the additional 300MW quota under the NEM NOVA initiative can be made from 15 November 2021. KETSA has stated that the release of the said quota is expected to create an estimated investment value of RM1.2 billion and create 3,600 job opportunities, both of which will contribute towards Malaysia’s economic recovery as it emerges from the Covid-19 pandemic.
In these times where Environmental, Social and Governance (ESG) goals have become a key area of focus for corporations, the NEM Programme is an attractive opportunity. The adoption of solar energy – a renewable and clean energy - allows corporations to be a part of the clean energy transition movement as well as enjoy cost savings arising from the offset and/or virtual aggregation of excess energy generated. This has resulted in Malaysia seeing a significant uptick in the development of rooftop solar projects, as evidenced by the fact that the initial 300MW quota for the NEM NOVA initiative that was released in April 2021 was fully taken up by July 2021. KETSA’s announcement will therefore be very welcome news to both industry players and energy consumers.
Alert by Richard Khoo (Partner) and Rachel Chiah (Senior Associate) of the Projects and Infrastructure Practice of Skrine.

1 The full text of KETSA’s announcement is available here.
2 Our article on cross-border electricity trade, including the requirements of cross-border electricity sales to Singapore, is available here.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact