Bright but patchy outlook for solar push

The sector offers hope of lower bills and greater energy security, but financing, grid integration and policy execution remain hurdles

PUBLISHED : 5 May 2026 at 08:27

NEWSPAPER SECTION: Business

WRITER: Yuthana Praiwan

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Stronger promotion of solar power by Thai authorities amid an energy crisis holds promise, but still faces challenges, say industry analysts.

The clean energy is in the spotlight after global conflicts continue to push electricity prices higher, leaving households and businesses vulnerable to volatility.

The Israel-US war on Iran has disrupted oil and gas supply chains, echoing the start of the Russia-Ukraine war in 2022 when Thailand's electricity costs surged by 19% -- about 130 billion baht -- due mainly to soaring liquefied natural gas (LNG) prices.

While energy prices eventually stabilised, the current crisis is more severe. Damage to oil and LNG infrastructure could take at least 18 months to repair, meaning electricity costs will remain unstable.

Against this backdrop, Thailand's push for solar power offers hope of lower bills and greater energy security, but financing, grid integration and policy execution remain significant hurdles.

## HERE COMES THE SUN

Thai energy analysts are urging a decisive pivot towards renewable energy, notably solar energy.

Asst Prof Prasat Meetam, a leading voice in the sector, proposed authorities accelerate investment in solar power combined with battery storage.

He said this shift would not only reduce electricity costs in the long term, but also strengthen energy security by cutting dependence on imported fuels.

Asst Prof Prasat pointed to the United Arab Emirates (UAE) as a model. Through its US$5.9 billion Masdar RTC project, the UAE built a system capable of powering up to 1 million households around the clock.

By pairing solar generation with advanced batteries, the project achieved a long-term levelised cost of electricity of just $0.045-0.055 per unit -- roughly 1.48-1.82 baht -- significantly cheaper than fossil fuels.

Thailand could replicate this success. Replacing 1,000 megawatts of gas-fired power plants with 4,900MW of solar-plus-battery systems at an 85% utilisation rate would cut LNG imports by about 45 billion baht annually, he said.

With solar systems lasting 25-30 years and batteries around a decade, the investment would pay dividends for decades while reducing foreign currency outflows.

## GOVERNMENT INCENTIVES

The government is already moving in this direction, with Finance Minister Ekniti Nitithanprapas unveiling measures to promote rooftop solar panels as part of a broader economic stimulus.

Households that install panels between March 3, 2026 and Dec 31, 2027 can deduct up to 200,000 baht from their personal income tax. The scheme covers installations up to 10 kilowatts in capacity, aiming to make self-generation more accessible to the public.

"Having a self-generating power unit not only reduces the cost of living, but also accelerates the transformation to a cleaner electricity system, as we rely almost entirely on imported oil and gas," Mr Ekniti said.

In the long term, the government plans to upgrade rooftop systems to facilitate households selling excess electricity back to the state grid, turning consumers into prosumers.

Ion Energy Corporation, a fully integrated solar service provider, estimates 1.3 million houses in Thailand (excluding condos) have the potential to install solar panels. Only about 5% have done so, leaving vast untapped potential.

Pongsapak Nakornsri, co-founder and executive chairman of Ion, welcomed the government's policy, but cautioned that success depends on accessible financing.

If structured correctly, with simple access to unsecured financing and sustainably low interest rates, the programme has the potential to meaningfully accelerate rooftop solar adoption across Thailand, Mr Pongsapak said.

"I would like the government to pay more attention to the details. Otherwise, the dream might not come true," he said.

## FINANCING HURDLES

Ion Energy executives stress while the tax deduction shortens the payback period to 3-4 years, many households still struggle to afford upfront costs.

Chief executive Peerakarn Manakit said the loan structures are often too complex.

Past schemes required homeowners to use their property as collateral, effectively turning solar loans into mortgage top-ups. This discouraged adoption, as few were willing to risk high-value assets for relatively small loans.

A more practical model would resemble auto financing, where the solar system itself serves as collateral, said Mr Peerakarn.

Interest rates are another sticking point. While promotional rates in the first two years are attractive, long-term rates often climb into double digits.

For rooftop solar to succeed, he said effective rates must remain competitive -- ideally at or below 5% throughout the loan period.

Mr Pongsapak said the Government Savings Bank's soft loan initiative is a step in the right direction, offering 3.25% interest for the first two years.

However, once the promotional period ends, the loans convert into personal loans with much higher rates.

"More people will install solar panels if the government communicates to the public that generating electricity on their rooftops has proven to yield faster returns than investments in the capital market, stocks or bonds," said Mr Peerakarn.

## THE PROMISE OF PROSUMERS

If financing challenges can be overcome, Thailand could see a transformation in its energy landscape.

Households and businesses would become prosumers -- both producing and consuming electricity -- similar to models in Organisation for Economic Co-operation and Development countries, according to Ion.

This shift would decentralise power generation, reduce reliance on imported fuels and empower people to take part in the energy transition.

Still, analysts caution the road ahead has obstacles. Beyond financing, technical challenges such as grid integration and intermittency must be addressed.

The sun is an intermittent source of electricity, determined by sunlight and weather, affecting solar power stability.

Asst Prof Prasat emphasised the need to strengthen the power grid to handle fluctuating renewable inputs. Without adequate storage and smart grid systems, solar adoption could create instability rather than resilience.

Moreover, while government incentives are promising, he said long-term policy consistency will be crucial.

Investors and households alike need confidence that support measures will not be abruptly withdrawn.

According to Ion executives, clear communication, streamlined loan processes and sustained interest rate management will determine whether Thailand's solar push becomes a lasting success or stalls after initial enthusiasm.

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- KEYWORDS

- Thailand solar energy

- Rooftop solar panels

- Renewable energy policy

- Electricity cost reduction

- Solar power investment

- Energy security thailand

- Solar battery storage