NET ENERGY METERING (NEM) PROGRAM
Net energy metering (NEM) is a program initiated by Minister of Energy and natural Resources (KeTSA) to encourage Malaysia’s Renewable Energy (RE) uptake. This program is regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the implementing agency.
Net Energy Metering 3.0 (NEM)
The mechanism where a NEM Consumer installed a solar PV Installation on the roof-top of his Premise primarily for his own use. During the first ten (10) years of operation, any excess Energy which is not consumed due to operational constraints or monthly or seasonal variation in load demands at the said Premise may be exported to the Distribution System. The credit to be received for such excess Energy may be used to offset part of the electricity bill for Energy provided by the Distribution Licensee during the applicable Billing Period.
The credit (excess energy) to NEM consumer will be based on average SMP. The calculation for net offset amount of Energy shall be based on the following calculation and shall not be used to offset the minimum monthly charge as stated in the tariff category of the Distribution Licensee:
Net Energy charge (RM) = (Energy imported from Supply System* x prevailing
gazetted Energy rate) – (Energy export to Supply System x Average SMP)
Applicable For TNB Tariff Below:
One of the great benefits of having a solar system installed on your building is the double tax incentive – CA and ITA. These 2 taxes can be applied to reduce the total business tax payable and shorten the return of investment to less than 3.5 years. Details as below:
1. Capital allowance (CA)
Similar to the claimable deductions when you buy new machinery or office equipment (fixed assets), you are eligible to claim this tax incentive under “plant & Machinery” over six(6) years. The CA incentives contains the following:
Initial Allowance (AI) of 20% for the first year
Annual Allowance (AA) of 14% for the subsequent year until the full amount has been accounted for
2. Green Investment Tax Allowance (GITA)
This is another tax claimable for the Solar project application received by MIDA until until 31 December 2023. With 100% of the solar system project cost (qualifying capital expenditure, QCE) involved, can be utilized to offset against 70% of statutory income.
For more information: https://www.mgtc.gov.my/what-we-do/green-incentives/green-investment-tax-incentives-gita-gite/