The Economic Assessment of Small PV Rooftop Residential Installations in Malaysia Under Net Energy Metering Scheme

Abstract

Under the Net Energy Metering (NEM) 2.0 Scheme which was introduced by the Sustainable Energy Development Authority (SEDA) of Malaysia in January 2019 consumers could benefit more from installing solar PV on the rooftops of their homes which allow the excess of the generated energy to be exported to the grid on a one-on-one offset basis, instead of at the Displaced Cost as previously implemented under the NEM 1.0. The period of the return on investment (ROI) of the PV installations would depend on both, the energy consumption patterns and the PV system configurations, in addition to the external factors such as weather fluctuation, roof orientations and inclination angles. Generally, a significant saving could be achieved from the solar PV installation in individual homes with high energy consumption and with a big capacity of solar PV systems installations. This study evaluated the economic benefits of small PV rooftop systems in homes that consume less than 600 kWh monthly with PV installation of less than 4 kWp. The period of ROI was evaluated based on the electricity consumption pattern, the electricity tariff billing structure, and the actual generation from a selected PV installation. The ROI payback period of 6.5 to 8.0 years could be realized with the correct sizing of the PV systems. This information could inspire small homeowners to install a rooftop PV system under the currently available NEM 3.0, first to reduce their electricity bills and to contribute to the Nation’s inspiration of the Net Carbon Zero target by 2050.