Even with a subsidy, the upfront installation cost still may not make up for future savings and income in poorer households
Toey Wattana Mongkhonnam began thinking about outfitting his family home in Thailand’s northeastern province of Yasothon with solar panels during the Covid-19 pandemic.
In his household of five, electricity use rises with the day’s heat, and the monthly bill could range from 1,000 baht to 1,500 baht (US$30 to US$45).
“Back then, I checked prices and a rooftop panel system that could put out enough power to run my household’s appliances could cost 100,000 baht to 200,000 baht,” said Toey, a Muay Thai trainer in Kuala Lumpur.
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Toey’s calculations capture the challenge facing Thailand’s recently proposed 50-billion-baht (US$1.5 billion) rooftop-solar support scheme: whether it can make the switch attractive not just to high-use households but also to those with lower bills who may have less money to put towards the initial cost.
The government said on September 2 it aimed to help up to 1 million households install 5 gigawatts of solar capacity on their rooftops, presenting the proposal as both protection against volatile power costs and a way to reduce the country’s dependence on imported liquefied natural gas.
A week later, the government discussed the possibility of expanding the target to as many as 1.5 million households. A government representative said on Friday the capacity target had been doubled to 10GW.
But whether the scheme achieves that broader reach could depend on more than subsidies. Rules on financing, eligibility and grid connections could determine whether household solar becomes accessible to families such as Toey’s or only to those who use more power with the funds and roofs to install it.
Under Thailand’s existing residential rooftop-solar programme, households must pay for the installation themselves before they can enjoy lower electricity bills or income from selling excess power to the grid.
The proposed 50,000-baht subsidy may reduce the upfront cost, but the savings a household gets from solar will still depend on how much electricity it uses and when it uses it.
Saving over selling
Another Yasothon resident, Saenmuang Chaichan, said his four-person household had also considered rooftop solar.
“We pay about 1,000 baht to 2,000 baht a month for electricity, and our usage is highest during the day and early evening, especially in hot weather because we run air conditioners and fans,” Saenmuang said.
Neither he nor Toey was thinking of making money from selling solar power, they told This Week In Asia. They just want to reduce how much electricity they buy from the grid.
That distinction matters, according to Evan Ng, Siemens Energy’s Asia-Pacific energy transformation consulting team lead.
Savings would not be the same for every household.
Those with higher electricity use, especially during the day, were likely to save a lot because they could offset more electricity bought from the grid, Ng said. But those who use less electricity may not be able to see much savings, while still having to pay the upfront installation cost.
In Thailand, residential tariff rises according to higher levels of electricity use, with fuel-adjustment charge applied separately. So the value of each unit of solar energy consumed on site can be higher for households with greater usage.
“The 2.20 baht per kWh payment for surplus electricity exported to the grid is relatively low compared with the value of electricity that households can avoid purchasing from the grid,” Ng said.
“The economics of residential solar are likely to continue to depend primarily on self-consumption and avoided retail electricity costs, rather than on selling surplus generation back to the grid.”
The subsidy could shorten payback periods by about 1 1/2 to two years, said Haneea Isaad, an energy finance specialist at the Institute for Energy Economics and Financial Analysis.
But the programme’s impact would depend on the financing structure, system size requirements and eligibility rules. If it were taken up only by households with higher demand, the scheme could exacerbate a “rooftop solar divide”, she said.
For lower-income households, direct capital reductions and affordable finance might be more of a draw than higher buy-back payments, Isaad said, because they were likely to consume more of their solar power themselves.
Coping mechanism
Then there is the question of whether local electricity networks can connect to so many rooftop systems without delays or restrictions.
“The constraint isn’t necessarily the number of rooftop solar Thailand can add at the national system level,” Ng said. “The more immediate constraint is how much distributed generation individual parts of the distribution network can accommodate at a given time and location.”
Thailand’s thermal generation fleet gave the broader system flexibility, he said. But a local feeder or distribution transformer may not be able to cope with many systems generating surplus power at the same time – such as during periods of high sunshine and low local demand.
That can create risks including voltage rises, reverse power flows and transformer overloading.
One way around it would be to use smart meter, feeder and inverter data alongside digital network models to identify where new rooftop systems could connect without major upgrades. Such tools could also show where export limits, smart inverters, batteries or more detailed technical assessments might be needed.
That would be especially important if Thailand reached its 1.5 million household target, he said. Processing individual applications could be time-consuming, while a feeder-level assessment could show applicants earlier whether their location is likely to face connection constraints.
For Toey and Saenmuang, the 50,000-baht subsidy, if it materialises, will help to varying degrees.
“It would help a lot and make the decision to install easier,” Saenmuang said. “But if the system we need costs more than that, we would still need some additional savings.”
Toey agreed. “My family would still have to find more money to cover the cost of the solar panels,” he said.
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