There were various reports prescribing about the tremendous growth in the country’s PV Solar market. From one of the reports, published by Reuters on July 23, 2015, which was describing the increasing capacity of the PV solar by 700MW and 1.2GW soon. There could be an investment of around $2.5 billion by the 2015 year end. In addition, it was said that Thailand could be the most attractive market in the whole South East Asian market.Analysts working within the industry have estimated that around 250,000 new rooftop solar PV systems could be added by 2020.
As a part of the goal, it was announced to achieve 30% share of renewable energy with an object of 6000 MW PV solar capacity. The Thai government has also approved the latest Alternative Energy Development Plan which outlines the country’s ambitious targets.
In September 2015, the government had launched the government agency and agricultural cooperatives program with a target of 800MW, this was also aimed at realizing solar farms up to 5 MW in size in the form of public private partnerships. Overall, the government was expected to invest some THB 36 billion (USD 1 billion) in various projects in 2016. According to the latest release of the Energy Regulatory Commission (ERC), only 470 MW solar power had been installed in 2014, 722 MW in 2015, and 732 MW have been installed just in the first nine months of 2016.
According to a Market Research Thailand’s 2016 report – “Given that rooftop PV solar currently accounts for 5% of Thailand’s market, solar self-consumption is forecasted to expand rapidly in the near future. A pilot project for up to 100MW is underway for which 10MW have been reserved for household systems below 10kW.” Undoubtedly Thailand has a great potential for both farms and rooftop solar systems. Although according to the ERC release, in above paragraph, in 2016 they lag to fulfil the promises and got lost in uncertainties and promised to emerge with the real growth and sustaining improvement in 2017.
Current Obstacles in Achieving PV Solar Goal:
- Policy uncertainties: The Adder support for PV solar power that began in 2007 was interrupted in the three years between 2010-2013 and was followed by a brief opening of new support in the form of feed-in tariffs in the two months’ period between October-November 2013. Uncertainties and discontinuities in incentive scheme or financial support policies make project investment valuation difficult and severely limit investors’ interest.
In addition to the Energy Industry Act 2007, solar projects sized greater than 3.7 kilowatts have to comply with the Factory Act 1992, the Building Control Act 1979, and the Energy Production and Development Act 1992, and the associated authorities.
- Governance: Despite the presence of the Alternative Energy Development Plan (AEDP) and its targets, there is no mechanism to ensure that the targets are met and that relevant agencies the public sector undertake their responsibilities in the most effective manner. Complicated permitting procedures remain a major barrier to PV solar power development of any scale. In 2017, the 25% earlier was revised with 40% of the total power generating the capacity of the country by 2036.
- Economics: The high upfront cost of PV solar power remains one of the highest ranked barriers. The International Energy Agency (IEA) has forecasted a declining trend of PV solar module cost as shown in Figure 2.4. It is expected to fall 50% in the next 20 years to $0.3-0.4 (real value) per watt-peak by 2035. Utility scale prices are expected to be in the range of 4.8-11.9 US cents/kWh by 2035; whereas rooftop-scale system prices are expected to be in the range of 5.5-19.7 US cents/kWh by 2035 (IEA, 2014, p.p. 24). In general, PV solar module cost declines 20% (23- 24% for thin films and 19-20% for c-Si) for every doubling of cumulative installed capacity (IRENA, 2012). Reducing soft costs of solar PV may play a critical role in making PV solar more financially viable in Thailand.
Government’s Initiate Toward PV Solar Barriers:
Thailand has also set up an Alternative Energy Development Plan (AEDP) which targets to increase the share of renewable energy to 25% of final energy consumption by 2021. The major bet has been put onto PV solar energy. Although the government has made several provisions to implement it, there are few barriers especially permitting barriers and financial barriers. The government has tried to remove some financial barriers in implementing PV solar energy roof tops. The government has reopened the support in 2014 in the form of feed in tariff for a quota of about 500-600MW of new solar farms. According to a Reuters report, companies planning to take part include Thai Solar Energy, which plans to partner with cooperatives and state agencies for 49 MW, and Inter Far East Energy Corp, which is looking to develop 11 MW of projects with the Thai navy. Thailand’s Energy Regulatory Commission has said it expects some 1,200 applicants in Phase 1, including both private developers and public agencies.
PV Solar Companies in Thailand:
- Engineering, procurement and construction:
- Local company: Ekarat Solar, Bangkok Solar Power, Leonics ESCO, Thai Solar Future, CH.Karnchang, Power Solution Technologies, Pro Solar Group, Energy&Environmental Management, SPCG
- Foreign company: Annex Power, Conergy, Jardine Engineering, SunEdison Energy Engineering, REC Systems, Mctric, Performed Line Products, Sonnedix Solar, Solventia Solar, Tsus Excellent Engineering
- System monitoring:
- Local Company: Leonics-MoC, SPCG
- Foreign company: Conergy
- Operations and Maintenance:
- Local Company: Leonics ESCO, Power Solution Technologie0s, Energy&Environmental Management, SPCG
SWOT Analysis of PV Solar:
- Geographical location: centre of ASEAN, no big disasters take place
- Longer experience a compared to other ASEAN countries
- Incentive policies in the country
- Unstable policies
- Difficult to compete on price
- No promotion
- Some problems arise from incentive policies
- A leading country of ASEAN in solar utilization
- Consulting for neighbouring countries
- Hub of PV solar testing under tropical conditions
- Singapore and Malaysia have high potential to widen their international markets
Statutory Guidance for PV Solar:
On 16 July 2013, (2556) the National Energy Policy Council approved regulation No. 2/2556 (hereafter B.E. 2556), determining the purchase of power from PV solar rooftop systems under a Feed-in Tariff (FiT) scheme for a total of 200 MW. The eligible amount of purchase of 200 MW was distributed over two system types, being, on the one hand, residential systems with a capacity up to 10 KWP (type 1); and on the other hand, small business building systems with a capacity of 10 to 250 KWP as well as medium to big business building and factory systems with a capacity from 250 to 1.000 KWP (type 2).
Type 1 and type 2 received both a total amount of purchase of 100 MW. The Feed-in-Tariff was granted for a period of 25 years for the before mentioned types of installations. While residential systems receive a FiT of 6.96 Baht/kWh, small business building systems receive 6.55 Baht/kWh and medium to big business building and factory systems obtain 6.16 Baht/kWh.
According to a notification of the Energy Regulatory Commission (ERC), the eligible total amount of purchase of 200 MW was further distributed to the areas of responsibility of the two distribution utilities, namely the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA). To this end, MEA received a total amount of purchase of 40 MW for residential systems (type 1) and an additional 40 MW for small business building systems and medium to big business building and factory systems (type 2). PEA was awarded 60 MW for residential systems (type 1) and an additional 60 MW for type 2 systems (small business building systems and medium to big business building and factory systems).
The sequence of how administrative process will go is as follows:
- ERC announcement of power purchase opportunities
- Submission of applications to power distributors
- Evaluation of application by power distributors
- Publication of list of successful projects
- PPA signing
- Completion of administrative process and required permits
- System construction and installation
- System testing by power distributors
- Commercial operation
Judicial Preference Standards/ Permits required:
- First come first serve basis, connection possibilities to the power network.
- Factory operation license: if capacity is more than 5 horse power.
- Building permit: Under the Building Control Act 1979, building permits (also called licenses of modification of building) from local authorities may be required for the construction of a PV solar rooftop installation.
- Inverter certification: The two distribution operators, namely the Provincial Electricity Authority (PEA) as well as the Metropolitan Electricity Authority (MEA), required for a certification of applied inverters for rooftop systems in their operation areas. In this regard, PEA is responsible for 73 Thai provinces; MEA is covering 3 Thai provinces, including the capital Bangkok. For the certification two testing procedures are commonly applied by both operators: a type testing, evaluating around 12 test items, as well as a routine testing, considering only 3-4 test items.
Electricity Cost per kWh (Baht/kWh):
- Residential service: 3.3799
- Small general services: 3.7269
- Medium general services: 3.3272
- Large general services: 2.9833
- Specific business: 3.0501
- Non-profit organization: 3.1747
- Agriculture pumping: 2.7935
- Temporary power customer: 6.2902
These are the average tariffs, they keep on changing with usage and it is adjusted every 4 months. The above information is as provided by the government on 22nd August 2012.
Feed in tariff rates of PV Solar:
Would battery back-up be needed?
Yes, a battery back-up is needed. All the companies provide this in their hardware kit.
Who would want PV Solar?
The market is having high potential. This is growing market in Thailand and government is currently supporting PV solar installation heavily to fulfil its targets for renewable sources of energy. Apart from residential, there is a big market of PV solar in government offices, big corporates, agriculture units, military and defence etc. These are the areas where large electricity is used and PV solar can be a good source of cost cutting for them.
Craft Driven Market Research’s recommendation:
- It would recommend majorly targeting big corporate bodies and selling them at a competitive price. The residential sector should not be left but does not need more focus since it is a sector of lesser revenue. To cater to residential customers, online buying option can be made available along with separate hardware kits which are able to be used with other company products as well. This will help you to take on market share of existing companies.
- Do not make your product specifications different from standards or conventions, since you can sell different components of PV solar separately if they are adjustable with other company products.
Stability of feed in tariff:
As has been mentioned above, government policies are highly unstable in Thailand and you should not rely on government’s commitment.
Why No Market?
Currently, the market is growing rapidly. The market is in the development stage which makes an illusion of no market but in a very short time. Therefore, Thailand is going to be the biggest solar power enabled country among all the ASEAN countries. This also gives an opportunity to establish your services in neighbouring countries by directly exporting as well as by providing consultancy to the companies there.
Investing in PV solar market today in Thailand can reap great profits in near future.
ROI on 4kW Solar Panels in Thailand:
There are a number of factors that affect the actual power output, for example, geographical location, orientation and tilt angle of solar panel array, amount of shade case on the solar panel, temperature.
A typical solar panel system generates savings of £8,080 over 20 years and costs around £6,000 i.e. ROI of £2,000.
Saving Money with 4kW System:
- Energy Bill Savings: It can reduce up to 50% of electricity bills.
- Generation Tariff: FiT pays for all the electricity produced regardless of whether it is used to power home or not.
- Export Tariff: It pays you for all the electricity you don’t use and goes to the power grid. Even if you use all the electricity to power your home, you will still get the payment which lasts for up to 25 years.
So, ROI mainly depends upon the Fit confirmed by the government.
In 2013, Thailand government confirmed a tariff of BHT 6.85/kWh for a ground mounted (200 MW quota by Dec 2015) panel, for a term of 25 years.Tags: ASEAN, Craft Driven, Craft Driven Market Research, Energy Regulatory Commission (ERC), Feed-in-Tarif, Market Research Thailand, PV Solar, Reuters