Review Thailand’s rooftop solar option

Construction News

Review Thailand’s rooftop solar option

Following the past year’s cabinet meeting on Dec 19, Energy Minister Pirapan Salirathavibhaga said the government would continue to subsidise electricity to households, declaring the move as a “New Year gift for the people”.

This would seem risky in light of the Energy Regulatory Committee’s recent ruling that an increase in electricity tariff rates was necessary as the country imports expensive liquified natural gas (LNG) to keep power plants running.

What if there were a very low-cost source of electricity that could be turned on immediately, at nearly zero cost, and offset the consumption of LNG, helping the energy minister’s wish to keep tariffs low? And what if, moreover, this was a clean, renewable energy that is already installed in Thailand, ready to go at a moment’s notice?

Sounds too good to be true? Enter thousands of solar photovoltaic (PV) panels installed on the rooftops of shopping malls, factories, and warehouses around the country.

Perversely, local distribution utilities like the Metropolitan Electricity Authority (MEA) and Provincial Electricity Authority (PEA) require a software setting that forces the solar panels to throttle back so that the solar production can, at most only match, instant by instant, the electricity consumed by the customer.

Only self-consumption of solar electricity is permitted. A particularly sunny afternoon? Workers away at lunchtime, with equipment turned off? Weekends and holidays? Solar panels are throttled back. They could generate a lot more electricity with a simple software setting change. And this additional electricity would come at zero fuel cost because, well, the sun shines freely on everyone.

How much electricity are we talking about? It’s difficult to measure electricity that could have been generated but wasn’t, but it can be estimated. According to the National Energy Planning and Policy Office, about 72 million kilowatt hours (kWh) were generated by these installations for self-consumption in October 2023.

Because the timing of sunlight doesn’t match up perfectly with the timing of electricity use, most installations would be able to generate 50% to 100% more if their full output was allowed. This means somewhere between 35-70 million kWh were curtailed in October.

Considering that the Electricity Generating Authority of Thailand’s (Egat) sales hit about 17,100 million kWh in the same month, this refused clean energy amounts to about 0.2% to 0.4% of the country’s electricity use. Not a huge amount, but every bit can help — especially if it is inexpensive, clean, and immediately available.

What’s a fair price? Considering the zero fuel cost, customers with these systems could afford to sell their surplus emission-free electricity to the MEA and PEA at a fraction of the cost of electricity generated by burning LNG.

The PEA and MEA already compensate small household rooftop systems (under 10 kilowatts) at 2.2 baht per unit for excess electricity. This is less than half the price of electricity that these same customers pay when buying electricity from the utilities. In the case of household rooftop solar, utilities benefit by immediately selling one customers’ surplus to their neighbour at more than a 100% markup.

Utilities could extend the same deal to commercial and industrial customers. Or they could pay less: even 1 baht per kWh, which is way lower than the cost of generating electricity from natural gas.

Or, if feeling especially stingy, they could pay zero baht. Free electricity!? Zero baht would be unfair, but it is still better than utilities throttling back solar output so that it never flows onto their wires.

At least facility owners could feel satisfied knowing that their solar panels, converting sunlight at zero fuel cost, were contributing their full potential to reducing the country’s fossil fuel use.

Extending to commercial and industrial customers the same or similar win-win deal that households get is a ridiculously easy step that Thailand could take towards meeting its climate commitments and lowering the border adjustment mechanism taxes that Thai exports have to pay in foreign markets because of the high carbon content of the Thai electricity mix.

In the face of political pressure to keep tariffs low while squeezed by high electricity costs from LNG, and in an environment where clean energy increases economic competitiveness, why don’t utilities make this simple policy change and accept solar electricity from their commercial and industrial customers?

Chris Greacen, PhD in Energy and Resources from the University of California, is an independent consultant on renewable energy and mini-grids. In the early 2000s, he helped draft Thailand’s Very Small Power Producer (VSPP) regulations.