Solar PV System (NEM 3.0) under New Electricity Tariff

 

From 1st of Jul 2025 onward, TNB has introduced new electricity tariff which divides the charges into 3 categories:

• Generation charges: Energy Charge, Automatic Fuel Adjustment (AFA) and Capacity Charge
• Network charge: cost of delivering electricity
• Retail charge: cost of billing & customer service

This new structure will be unfair to households with solar PV system under NEM if the solar electricity only can offset the energy charge, as the capacity and network charges are relatively high.

Nevertheless, in the end, fortunately all those charges can be offset one to one.

The new electricity charges are as below:

The tariff rates are simplified into 2 groups, which are total consumption at or below 1,500 kWh (energy charge 27.03 sen/kWh) and above 1,500 kWh (37.03 sen/kWh).

The only difference between these 2 groups is the energy charge, while other charges are the same.

It is important to note that for total consumption of 600 kWh and below per month, the retail & AFA charges are waived.

The rate of AFA will change monthly according to market fuel price and foreign exchange rate.

For total consumption of 1,000 kWh and below per month, customers are eligible for Energy Efficiency Incentives.

Before installing solar panels, my average monthly electricity consumption was 700 kWh.

After solar panels, my average monthly consumption is between 400-450 kWh which will exclude me from the retail & AFA charges.

In the last 3 months with solar panels, the electricity I exported to the grid exceeded the electricity I used from the grid, so my monthly electricity bills are basically zero.

This image below shows my latest TNB bill for August 2025, compared to previous 5 months.

My August bill is merely RM2.15, because of the KWTBB (Kumpulan Wang Tenaga Boleh Baharu or Renewable Energy Fund of 1.6%.

My "Baki NEM" has increased to 277 kWh, which is equivalent to about 12 days my normal electricity consumption without solar panels.

The image below shows the breakdown of my August TNB bill. Do take note that the Incentive Cekap Tenaga or Energy Efficiency Incentives is quite high at RM0.145/kWh.

Only those with total consumption of 1,000 kWh and below per month are eligible for this incentive.

In the last 3 months, my 6.40kWp solar panels generated 650 kWh, 768 kWh and 723 kWh of electricity respectively.

So far this is better than what I expected as I thought I might still need to pay TNB bills around RM50 per month after installing the solar PV system.

While introducing the new TNB tariff, Time of Use (TOU) scheme is also extended to all TNB customers including domestic customers. 

TOU scheme offers different electricity rates for peak and off-peak hours. Previously it was only applicable to medium and high voltage customers.

In this extended TOU, peak hours are between 2pm to 10pm from Monday to Friday, while 10pm to 2pm is off-peak hours. Saturdays, Sundays and public holidays are considered off-peak for 24 hours.

For domestic TOU with monthly consumption at or below 1,500 kWh, the energy charge for peak hours is 28.52 sen/kWh, which is 1.49 sen/kWh higher than 27.03 sen/kWh for non-ToU, but the rate of off-peak hours will reduce 2.60 sen/kWh to 24.43 sen/kWh.

For households with not many people at home during day time, and turn on air-conditioners the whole night while sleeping, then this TOU scheme is a no-brainer.

Consumers can switch to TOU online through myTNB portal or visit any Kedai Tenaga. A smart meter needs to be installed though.

There will be a RM10 stamp duty charge for the switch to TOU and consumers can switch back to general tariff later if they are not happy with the TOU.

I'm keen to switch to TOU but since my solar panels are able to pay all my electricity charges, I will keep everything as it is first.

Actually my household air-conditioners usage is almost the same in peak & off-peak period but lower rate in the whole day of weekends & public holidays will make the difference.

I still think that solar panels under NEM + SolaRIS rebate is a great investment.

I paid RM12,000 for a 6.40kWp system which saves me approximately RM300 per month. The ROI is less than 3.5 years.

Even without the SolaRIS rebate, the ROI should be around 5 years.

While NEM has ended, most solar companies roll out SelCo with storage batteries.

SelCo has the obvious advantage of availability of electricity even during a power blackout, but I think it's quite rare to have power outage issue nowadays.

I'm not sure whether NEM or SelCo will bring more saving but SelCo will definitely cost more than NEM, which may prolong its return on investment.

Recently the government has announced a new scheme "Solar Accelerated Transition Action Program" or "Solar ATAP" which will replace the expired NEM.

There is still lack of detail on this new scheme which is slated to be launched on the 1st of December 2025.

Since Solar ATAP is considered a continuation of NEM, I guess both of them will be more or less the same.