Restructuring rooftop solar policies could encourage consumer energy independence, ease financial strain on state utilities, and reduce exposure to volatile global LNG markets
August 19, 2026 (IEEFA Asia): A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) finds that Thailand can accelerate rooftop solar deployment by reforming its current solar policies. This would reduce dependence on imported liquefied natural gas (LNG), improve energy security, and limit future pressure on rising electricity costs.
Thailand’s power sector remains heavily reliant on natural gas, which accounts for 66% of electricity generation. As domestic gas production declines, the country has become increasingly dependent on LNG imports, increasing exposure to global fuel price volatility and supply disruptions.
As a result, the state utility and buyer of last resort, Electricity Generating Authority of Thailand (EGAT), has had to bear substantial subsidy costs. By March 2026, EGAT carried more than THB36 billion (USD1 billion) in losses from past energy crises.
“Thailand has significant solar potential, but weak financial incentives and policy uncertainty have constrained rooftop solar deployment. Strengthening the policy framework would allow consumer-led solar adoption to play a greater role in Thailand’s energy transition,” says report author Haneea Isaad, Energy Finance Specialist, Pakistan, IEEFA.
Policy barriers have limited Thailand’s rooftop solar growth
Since 2018, solar energy has led incremental renewable energy capacity additions, with ground-mounted deployment accelerating in 2024.
As of early 2026, Thailand had approximately 11.8 gigawatts (GW) of solar capacity. Utility-scale, ground-mounted installations accounted for 8GW, while rooftop solar accounted for just 3.6GW.
Rooftop solar adoption remains limited despite abundant solar resources and decades of policy support. The report identifies several barriers to adoption, including high installation costs, low buyback rates, restrictive quotas, and policy uncertainty.
Rooftop solar installations in Thailand cost approximately USD936 per kilowatt (kW), nearly 50% higher than regional peers such as Pakistan, Malaysia, and Vietnam.
Under the current "Solar for Thai People" net billing scheme, the buyback rate of THB2.2 (USD0.07) per kilowatt-hour (kWh) remains below retail electricity tariffs averaging around THB3.88/kWh (USD0.12/kWh), resulting in payback periods of six to seven years for residential installations.
Tight capacity limits have also delayed consumer adoption. For example, the 90-megawatt (MW) residential quota set in Thailand’s 2019 net billing scheme was intended to run until 2030 but was fully utilized by 2024.
“The next few years will be crucial for sustaining Thailand’s rooftop solar growth. The government should consider adjusting its regulatory framework to improve project economics for consumers,” says Isaad.
Pakistan’s solar expansion provides a replicable model
The report examines the impact of supportive policies using Pakistan’s rapid rooftop solar expansion as a case study.
Since 2018, Pakistan has deployed 38GW of solar capacity by removing trade barriers, avoiding strict capacity caps, implementing an attractive net metering framework that adjusts excess generation on a kWh-to-kWh basis, and offering generous buyback rates.
These policies, paired with lower solar module prices and high electricity tariffs, shortened the payback period for net-metered systems to less than two years, resulting in more than 350,000 connections by the end of 2025.
In contrast to Pakistan’s single policy framework, Thailand has adopted sector-specific mechanisms for solar deployment. These include a rooftop solar net billing scheme for residential users, a feed-in tariff (FiT) approach for ground-mounted installations, and a community solar power initiative capped at 1,500 megawatts (MW).
Thailand’s compensation rates and buyback mechanism also hinder adoption, prioritizing self-consumption, leading to higher savings and shorter payback periods for households and businesses that consume a larger share of their solar photovoltaic (PV) output.
“Removing regulatory and financial barriers, similar to Pakistan, could boost the scale of rooftop solar adoption in Thailand, support the growth of a domestic solar installation and service industry, reduce electricity costs, and provide consumers with greater energy independence,” explains Isaad.
Supportive policies can accelerate rooftop solar deployment
Despite a 10-year net billing period, residential rooftop solar installations remain only moderately attractive in Thailand.
Current payback periods, ranging between six and seven years, and an export limit capped at 5–10kW per meter, weaken incentives for households to invest in rooftop solar systems.
The report recommends several reforms to strengthen rooftop solar project economics and shorten payback periods.
A key policy change suggested is transitioning from net billing to net metering, allowing consumers to offset electricity consumption at retail rates and reducing payback periods to approximately 5.5 years for 5kW residential rooftop installations and 4.5 years for 10kW systems.
Other recommendations include increasing rooftop solar buyback rates to achieve quicker cost recovery for consumers and higher profitability once initial investments have been recouped; streamlining tax incentives to reduce eligibility constraints for households and businesses; removing restrictive solar capacity limits and self-consumption thresholds; and accelerating solar-plus-battery energy storage system (BESS) deployment.
Read the report: Reforming Thailand's rooftop solar policy framework to reduce gas dependence
Author contact: Haneea Isaad ([email protected])
Media contact: Josielyn Manuel ([email protected])
