Has Power Hit the Roof?

 

Rooftop solar is becoming a critical component in Malaysia’s clean energy transition. Unlike large-scale solar farms that require vast tracts of land and long development timelines, rooftop systems work through panels on the roof of buildings, offering a quicker and more decentralised way for households and businesses to generate electricity. Despite its benefits, adoption remains low, representing only around 13% of Malaysia’s 269-gigawatt solar resource potential. 

One of the early initiatives to support rooftop solar adoption was the Net Energy Metering (NEM) scheme. Introduced in 2016 with a quota allocation of 500 megawatt up to 2020, the initial uptake came mostly from commercial and industrial sectors. These users had larger rooftops, higher energy usage and more financial capacity to invest in solar PV systems.

 

Source: https://en.wikipedia.org

Subsequent revisions of NEM, namely NEM 2.0 in 2019 and NEM 3.0 in 2021, introduced targeted categories to better support residential adoption, with the government recognising that commercial uptake alone is not enough to meet Malaysia’s carbon reduction goals. 

Collectively, rooftops across homes represent a vast, under-utilised solar real estate. Countries like Germany, Australia, and the United States show that broad residential participation is key to cutting carbon emissions. 

In Malaysia, users with solar panels under NEM could export excess electricity back to the grid and receive credit to offset their electricity bills. This made solar adoption financially attractive for residential users. 

With NEM 3.0 fully subscribed as of June, the government is expected to announce a new scheme by the end of August (still to be announced)! 

The government has been proactively introducing new initiatives such as Self-Consumption (SelCo), the Community Renewable Energy Aggregation Mechanism (Cream), and the Clean Renewable Electricity Supply (Cress). NEM’s success is due to its simplicity and accessibility.

Currently, many homes struggle to optimise solar usage since peak generation occurs during the day while most consumption happens at night. While battery storage could solve this mismatch, it significantly raises the cost and payback period for homeowners. However, panel prices have recently begun to climb, partly due to policy shifts and supply constraints in China, which is the world’s largest solar manufacturer. 

This may add cost pressure to both consumers and installers. To help ease the burden of upfront capital expenditure, many companies are now offering credit card instalment plans, making it more manageable for homeowners to invest in rooftop solar. 

Upfront costs remain a major deterrent for many small and medium enterprises. While rebates and leasing models provide some relief, they don’t fully close the affordability gap, especially for businesses with tighter cash flows or limited access to financing. 

On the Cream initiative, which involves leasing rooftops to energy companies that install solar panels and sell the electricity to nearby green consumers, it needs to strike a balance between homeowners and off-takers. While it taps into residential rooftop space, homeowners don’t get to use the power themselves. The scheme also requires aggregating multiple households, coordinating with different owners and securing a willing buyer within a 5km radius. For the average homeowner, NEM was much more straightforward. 

Can we do a mixture of personal income tax rebate, cost subsidy and NEM 4.0? If the residential market is fixed substantially then we could relieve TNB of more planting-up and they could then dividend-out more to their shareholders. 

Reference:

Power hits the roof? Gurmeet Kaur, Star Biz7, The Star, 25 August 2025