Recently, the Asian Development Bank revealed that Thailand plans to expand its solar energy initiatives to achieve carbon neutrality. You won’t believe it, but Thai authorities aim to generate 50% renewable energy by 2037. For foreign investors, the solar energy market promises to be a significant opportunity.
Current developments, such as solar-powered battery storage introduced an innovation wave in Thailand’s energy sector. Let’s discover the interesting facts:
Why invest in the solar energy market in Thailand?
1. Cost Optimisation
You’ll be surprised to learn that cost optimisation through solar energy generation models is highly popular in Thailand. For example, TotalEnergies installed a 1.8 megawatt-peak (MWp) solar photovoltaic system in the Thai market. Combining wood-based panels with the floating solar PV system led to this successful project. Under the Power Purchase Agreement (PPA), TotalEnergies planned the solar operations for 12 years.
2. Regulation of electricity prices
Thailand has mandated regular electricity price regulation to ensure a sustainable vision in the solar energy market. On December 28, 2024, Thailand’s Department of Industrial Works (DIW) announced a new regulation under which factory licenses for solar energy installations on rooftops or any part of a building, regardless of capacity, are no longer required.
3. Feed-in-Tariff scheme
A key advantage lies in this feed-in-tariff program available to foreign investors in Thailand. For instance, the Feed-in-Tariff (FiT) scheme guarantees prices for solar-generated electricity, ensuring high financial viability.
4. Tax incentives
Thai authorities will grant eligible solar energy projects corporate income tax exemptions for up to 8 years. In addition, solar firm machinery can be exempt from import duty. Subsequently, to set up a solar energy business in Thailand, a 25% tax exemption is provided on the cost of construction of facilities to foreign investors.
How can you invest in the solar energy market in Thailand?
To become a solar energy producer in Thailand, you must obtain a license from the Electricity Generating Authority of Thailand (EGAT). In addition, there are mainly 3 types of state-owned schemes in the Thai electricity supply industry:
- VSPP (Very Small Power Producer) has a production capacity of less than 10MW
- SPP (Small Power Producer) has a production capacity between 10-90 MW
- IPP (Independent Power Producer) has a production capacity of 90MW
Documents to be submitted to EGAT authorities
- Tender specifications on quantity and price
- Application for the SPP operation license
- Company affidavit certificates
- Piping and instrument diagrams
- Equipment guarantees
- Offer request letter for selling power
Note: As a result, the license will be granted after the 90-day document submission period along with a notification from EGAT. Simultaneously, the Power Purchase Agreement (PPA) shall be developed within 2 years to sell power initiated by the applicant.
Regulations to follow in Thailand
| ENERGY INDUSTRY ACT B.E. 2550 (2007) | “The ERC shall have the power to order a business operator …requiring a license but who has not yet obtained any license to stop or suspend the energy industry operation…” Section 49 |
| “When a licensee wishes to commence operation of any part of his electricity industry, the licensee shall have to inform the prior to the commencement date of the operation”…. Section 53, | |
| THE ENERGY CONSERVATION PROMOTION ACT B.E. 2535 (1992) | “The Director General may give an instruction to the owner of any designated factory, to furnish factual information on energy utilisation for the purpose of inspection, to assure the energy conservation measures are in accordance with the standard…” Section 10 |
| “Keep records of information on energy consumption and installation or modification of machinery or equipment that affects energy consumption and conservation…” Section 11(3) |
Therefore, solar businesses in Thailand present significant opportunities for foreign investors.
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