Understanding the Two Solar Frameworks

Malaysia’s rooftop solar landscape for businesses has primarily revolved around two mechanisms: Net Energy Metering (NEM) and the newer Solar Accelerated Transition Action Programme (Solar ATAP).

While both enable organisations to deploy rooftop solar, they are fundamentally different in design philosophy, risk exposure, and operational outcomes. Understanding these differences is critical for commercial, industrial, and government decision-makers.

Core Structural Difference

The most important distinction lies in how excess solar energy is treated.

• NEM allows excess solar electricity to be exported to the grid and offset against imported energy through bill credits.
• Solar ATAP prioritises on-site self-consumption, with surplus energy credited based on System Marginal Price (SMP) rather than a one-to-one tariff offset.

This shift changes solar from a billing optimisation tool into an energy usage optimisation strategy.

Comparison: Solar ATAP vs NEM

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System Sizing and Engineering Discipline

Under NEM, system sizing historically leaned toward maximising rooftop capacity to generate higher export credits. This occasionally resulted in oversized systems that depended heavily on regulatory support.

Solar ATAP introduces stricter engineering discipline:

• Non-domestic systems are sized relative to Maximum Demand
• Financial returns depend largely on self-consumed energy
• Oversizing reduces efficiency and ROI

For factories, offices, and institutional buildings with consistent daytime loads, this approach aligns solar generation more closely with real operational needs.

Risk and Policy Exposure

NEM operates as an incentive-based framework. Its economics are sensitive to:

• Quota availability
• Policy revisions
• Offset rules and programme lifecycles

Solar ATAP reduces this exposure by:

• Linking surplus value to SMP
• Removing reliance on fixed tariff offsets
• Emphasising on-site consumption rather than export optimisation

For organisations making long-term capital investments, this distinction significantly affects risk modelling and financial certainty.

Operational Fit for Commercial and Government Users

Commercial and government facilities typically exhibit:

• Predictable daytime loads
• High energy intensity during working hours
• Long asset ownership horizons

These characteristics naturally favour Solar ATAP. While residential users may benefit more from export-heavy schemes, ATAP’s structure aligns better with institutional energy behaviour and governance expectations.

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Conclusion:
Solar ATAP and NEM serve different strategic purposes. For commercial, industrial, and government entities, the shift toward Solar ATAP reflects a broader move toward self-reliance, engineering accuracy, and reduced policy dependency. Understanding these differences allows organisations to adopt rooftop solar not just as a cost-saving tool, but as a resilient energy asset.

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Sources:

• SEDA Malaysia: Net Energy Metering (NEM) & Solar ATAP programme guidelines
• ST Malaysia: Grid connection, Maximum Demand, and electricity supply regulations
• TNB Malaysia: Solar PV interconnection and export control requirements
• PETRA Malaysia: National Energy Transition Roadmap (NETR)
• IRENA: Distributed solar PV and self-consumption economics
• IEA: Market-based electricity pricing and commercial solar trends