Solar power: Thailand needs a strategy

Declining costs of solar panels and energy storage systems have inspired a push for a change in the way we produce and consume electricity. However, the rooftop solar market in Thailand remains in its infancy due to a number of planning and regulatory hurdles.

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Nation lacks a coherent solar strategy

Sopitsuda Tongsopit 
Noah Kittner

Declining costs of solar photovoltaic (PV) panels and energy storage systems have inspired customers and businesses to change the way we produce and consume electricity. Already, several shopping malls and factories in Thailand are using rooftop solar PV systems, which convert sunlight into electricity, to help power their operations and lower their electricity bills.

They are doing so by either purchasing the systems themselves or allowing a developer to invest, install and operate the systems on their own roofs and then sell the solar-generated electricity back to them. The latter model, known as the third-party private solar power purchase agreement model, has guided the rapid expansion of the US rooftop solar market and holds great potential in Thailand – but only if certain regulatory conditions can bring it to scale.

Besides private developers, the Thai state-owned distribution utilities, the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA), are quickly adapting and exploring ways to establish solar businesses themselves. At the most basic level, both the MEA and PEA (through its subsidiary) offer PV system design and installation services to homes and businesses. Though this move raises eyebrows, it shows how the rooftop solar market in Thailand is lively with eager new players and consumers.

However, the rooftop solar market in Thailand remains in its infancy and is yet to reach its full potential due to a number of planning and regulatory hurdles.

PROBLEMS

For one, self-production and self-consumption of electricity disrupts the conventional utility's business model of the state-run PEA and MEA. Under this established model, either the PEA or MEA runs a local utility as the sole electricity supplier in a given service area.

The trend is even more disruptive when third-party developers come and compete head-to-head with local utilities by selling electricity directly to retail customers. But these new developers need to connect their systems with the local utility's existing distribution grid.

With more customers going solar and businesses increasing the pace of solar adoption, the established utilities feel increasingly concerned about the potential loss of profit by the reduction in the sales of electricity. With this threat, it is expected that the incumbent utilities may not be particularly accommodating when owners of solar PV systems seek interconnection with their distribution system.

Second, the prevailing utility strategy does not accommodate grid interconnection. Indeed, the grid code that regulates technical and contractual relationships between the solar system owners and the utilities flies in the face of scaling up rooftop solar systems.

Another, and perhaps, the most important hurdle to the adoption of rooftop solar systems in Thailand is the lack of a supportive national policy framework. Given the abundant sunshine in Thailand, this may come as a surprise.

The dominant thinking by Thai engineers and politicians penalises solar power by either severely limiting production (the amount of solar that can be generated) and by generating an unnecessary oversupply of backup power to support on-grid PV.

OPPORTUNITIES

In Thailand, the peak solar electricity production coincides directly with the time people turn on their air-conditioners the most, which represent the biggest demand for customers, so it would make sense that buildings could save on their electricity bills with rooftop solar.

The problems are not solely technical in nature. Neither are they financial. Several PV projects do not lack the necessary capital or investment opportunities to begin installations. Instead, they have faced numerous regulatory barriers inhibiting their development including prohibitive rules for alternative business models, coupled with excessive fees to connect to the grid.

Solar power requires a change in engineering and political behaviour and thinking, because solar PV is managed and operated differently than conventional centralised grid systems.

At the same time, solar makes more financial sense than ever before and provides security, reducing reliance on importing gas from abroad for conventional electricity generation. Solar PV as a form of renewable energy is no longer advocated by just environmentalists. It is one of the cheapest sources of electricity and technologically advanced electricity options.

Enabling more people and businesses to participate in a solar PV market, and coupling regulatory incentives with smart industrial strategies, would increase the regional and global competitiveness of the Thai economy.

You can read the full story here: http://www.bangkokpost.com/opinion/opinion/1260246/nation-lacks-a-coherent-solar-strategy

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