Development of Solar Power System Installations in Thailand

Thai solar PV installations take three forms.

1. Ground-mounted solar installations or solar farms: These fall under ground-mounted PV purchase power agreements, including those run by government agencies and agricultural cooperatives.

2. Rooftop solar: Rooftop PV systems initially gained traction in 2013, when purchase power agreements for these were first rolled out, though these saw a surge in uptake over 2019-2022, when domestic household installations began to rise. On 17 December, 2024, the cabinet agreed to liberalize the rules for rooftop solar installations, and so these are no longer classified as industrial facilities and households are no longer required to seek a permit authorizing their installation. Deregulating the industry should now help to promote an increase in the use of clean-energy across the economy, including greater use of off-grid systems.

3. Floating solar: An example of this can be seen in the 1.8 MW system operated by Total Energies ENEOS^1/ in collaboration with S. Kitjai Enterprises in Khon Kaen Province. This is sited on a reservoir operated by the company and uses over 3,000 separate solar panels to generate 2,650 MWh of electricity annually. This is enough clean energy to cut CO2 emissions by 1,125 tonnes, or the equivalent of planting 16,800 trees. Likewise, the Electrical Generating Authority of Thailand (EGAT) also operates a floating solar hybrid installation in the Sirindhorn reservoir in Ubon Ratchathani. This produces 45 MW of output, providing clean energy that reduces CO2 emissions by 47,000 tonnes annually. Production from this site began on 31 October, 2021^2/.

The majority of domestic solar installations are grid-connected systems operating under purchase power agreements (PPAs). Almost all of these are for ground-mounted solar farms, which account for a full 93% of grid-connected solar capacity. By contrast, rooftop and floating solar installations represent respectively just 5% and 2% of grid-connected supply. By contrast, grid-connected systems without government-approved power purchase agreements (PPAs) are typically operated for self-consumption – i.e., electricity is produced and consumed by the same entity. In some cases, electricity may also be distributed directly to customers, in which case the generator is classified as an independent power supplier (IPS). More than 90% of IPS capacity is accounted for by rooftop solar installations (Figure 3). The latter is in fact becoming increasingly popular at home and abroad, especially among industrial and commercial users looking to cut both power bills and CO2 emissions.

Current Status and Installation Trends of Rooftop Solar in the Business and Residential Sectors

Impacts on Thai manufacturers of US tariffs on imported solar cells

The domestic solar industry, which had previously relied heavily on exports to the US market, has been significantly impacted by the announcement of steep increases in import duties on solar cells from Southeast Asia.

These hikes came in April 2025, when the US Department of Commerce announced new final rates for duties payable on solar cells and solar modules from Cambodia, Malaysia, Vietnam and Thailand. This has had severe consequences for the domestic solar industry, as shown below.
 

Opportunities for the Thai rooftop solar industry: Although these changes have clearly had a negative impact on exports, this situation has also created new opportunities within the domestic market for rooftop solar installations. This can be attributed to the following factors:

1. A change in the sales focus: Manufacturers that had previously relied on exports have been forced to pay closer attention to the domestic market.

2. Competitive pricing: To stimulate the domestic market, manufacturers may offer more competitively priced goods.

3. The promotion of innovation: Competing in the Thai market may lead to the development of products and services that are a closer match to domestic needs.

4. The development of domestic supply chains: This is an opportunity to develop a fully-fledged domestic solar supply chain.

Given this context, the recent increase in US tariffs – while posing a challenge for the Thai solar industry – should also be considered an opportunity that may catalyze growth in the domestic market for rooftop solar. If such growth materializes, it could help offset losses in export markets.
 

Factors driving stronger investment in rooftop solar installations

Rooftop solar offers a way for businesses to build long-term sustainable value, firstly by reducing spending on electricity and secondly by burnishing a company’s public image and better aligning corporate growth with environmental and social responsibility. Government support for the industry comes in the form of the feed-in tariff (FiT), which reflects the current true cost of electricity, and the adjusted buy-back rate for surplus power generated from residential systems (currently set at THB 2.20/unit). These measures have helped to shorten the payback period for PV installations. Other important factors that are also helping to stimulate demand include the following. 

• Rising electricity costs: Average per unit retail electricity prices climbed from THB 3.61 in 2021 to THB 4.57 in 2023 before falling back to THB 4.18 in 2024, and although the government has pledged to cap prices at THB 4 per unit through 2025, they remain high relative to the recent past. This has had significant impacts on businesses since electricity typically comprises a sizeable fraction of manufacturing costs (typically 10-30% of the total for factories) and operating overheads (often 15-20% of these for department stores or shopping centers). Installing rooftop solar offers a way of avoiding these pressures, which may in fact be worse than initially appear since prices can not only track upwards but can do so in a volatile fashion. The appeal of solar installations is being amplified by falling costs and ongoing progress with technology, which is then adding to the options available on the market and broadening the customer base. These shifts are naturally accelerating the adoption of PV systems among both residential and commercial users.

• Falling costs for solar cells: Prices for solar cells suitable for use in residential environments fell from THB 16/watt peak (Wp) in 2019-2020 to THB 10.5/Wp in 2023, while the cost of installed residential systems inched down from an average of THB 40/Wp to THB 39/Wp over the same period. For commercial and industrial users, prices for installed solar systems have dropped from THB 27.5/Wp in 2020 to around THB 20-25/Wp in 2023-2024 (Thai PV Status 2022, DEDE). These declines will help to stimulate additional demand.

Additional factors affecting the cost of commercial solar panel installations

In addition, other factors may influence the cost of installing commercial rooftop PV systems, including the type and manufacturer of the solar cells, the layout and structure of the roof, the cost of connecting to the grid, and relevant local regulations (Table 1).

A comprehensive analysis of these factors will enable businesses to accurately assess actual costs, plan investments efficiently, and select appropriate contractors and suppliers—ultimately ensuring the most cost-effective return on investment. 

Assessment of Business Benefits from Rooftop Solar Installations in Thailand

Economic, social and environmental benefits

This analysis shows that installing a rooftop PV system may generate three distinct types of benefit: clear economic returns, quantifiable environmental impacts, and sustainable social development. Moreover, these benefits are interconnected and mutually supporting since lower costs will help to improve quality of life issues, while imposing a lighter environmental footprint can help to raise long-term sustainable growth. And although the upfront costs may be high, the threefold benefits that are generated will accumulate and expand through the 25-30-year lifespan of the installation (Table 2). Installing rooftop solar systems thus makes for an attractive and compelling long-term investment.

Cost-benefit analysis

Any decision to install a rooftop solar system should include an analysis of the costs and likely returns,^6/  and in particular, by estimating savings resulting from reduced purchases from the grid and any additional income generated from sales of surplus electricity, annual returns can be forecast. Thus, if a 10-kW rooftop installation costs THB 500,000 to install and if this then results in annual reductions in electricity bills of THB 75,000-100,000 (or 15-20% of the total cost), this will give a payback period of 5-8 years, though businesses or buildings that experience peak consumption during the day will enjoy the greatest benefits. Further details are given below.
 

Household users: Rooftop solar installations are most suitable for households that are currently spending in excess of THB 3,000 per month on electricity since at this level, the savings will pay for the upfront costs. In these cases, a 3-10 kW installation costing between THB 170,000 and THB 430,000 will be most appropriate. This will provide household users with sufficient electricity to meet their needs and allow for excess to be sold back into the grid without straining household finances.

Industrial and commercial users: Businesses typically see peak demand for electricity during the day and because this coincides with the maximum output from solar cells, they make better candidates for solar installations than domestic users. This also allows businesses to use solar-generated power instantly without relying on battery storage. For many businesses, installations of at least 100 kW (costing some THB 3.3 million) will be most suitable since at this size, companies can exploit economies of scale to reduce per-unit costs. For many businesses, the typical payback period will therefore run to 3-5 years compared to 5-8 years for households.

Business Sectors Well-Suited for Rooftop Solar Investment in Thailand

Given the cost-benefit analysis outlined above, investing in rooftop solar offers potentially high rewards for companies, most clearly in terms of cutting long-term expenditure on electricity while simultaneously moving business activities towards a more sustainable social and environmental footing, in line with the increasingly popular ESG framework. The best candidates for PV installation will be businesses that use the most power during the day, that have access to sufficient space to accommodate solar installation, and for which electricity costs currently represent a significant share of overall production or operating overheads. A sectoral SWOT analysis of these issues shows that across the economy, many businesses would benefit from investing in their own solar facilities, though the exact nature and extent of these benefits varies from one industry to the next. However, external factors including the regulatory framework and government support for the industry remain key challenges and ongoing improvements in these areas will be necessary if broad-based demand for solar installations is to be maintained.
 

Table 4 makes clear that industrial companies, including those operating in manufacturing, heavy industry, and petrochemicals are among the most suitable for rooftop solar installations since these typically see heavy and ongoing demand for electricity. However, upfront costs may be significant, especially for businesses that operate through the night because in this case, switching to solar power would also require the installation of energy storage facilities, most obviously batteries.

Within the service sector (e.g., hotels, shopping centers, office buildings, etc.), rooftop solar offers a way for businesses to make their commitment to sustainability and to the ESG standards visible. Following this path will therefore not only help with the practical matter of cutting energy bills but will also help players develop unique selling points and build credibility in the eyes of customers who are concerned with environmental issues.

For agricultural operations, rooftop solar installations remain something of a rarity and their use in greenhouses and livestock operations is limited. Nevertheless, PV systems have the potential to provide farmers with a stable and low-cost source of energy, while at the macro level, they will have a significant role to play in shifting the industry to the adoption of smart farming, for example by supplying the power needed for automating irrigation, controlling temperature and moisture in greenhouses, and providing ongoing monitoring of the environment.

Overall, the clearest advantage of rooftop solar to emerge across all industries is its potential to save money. This is most pronounced for businesses that see peak demand during the day (most factories, shopping centers and especially offices) since this is also when solar cells are most productive. In many industries, the ability to demonstrate a commitment to sustainability may also be an important way of clearly differentiating a company from its competitors. By contrast, the most prominent obstacle to greater uptake is the potentially major upfront investment overheads that moving to solar power may entail, though this is likely to be especially problematic for capital-poor SMEs. Further problems may come from difficulties accessing the specialist skills needed for installation and maintenance, and uncertainty over government policy, which may impact returns over the long term. Going forward, the benefits of government promotion of clean energy are clear for all sections of the economy, while consumer demand for eco-friendly goods and services will steadily track upwards. Beyond this, progress with technology will continue to bring costs down and raise generating efficiencies, and this will add to the opportunities available to business, strengthening the case for adoption and pushing companies to maximize the long-term benefits that these systems offer (for details see Box A).