Reforming Thailand's rooftop solar policy framework to reduce gas dependence

Executive Summary

Thailand generates 66% of its power from natural gas, reflecting the country’s longstanding reliance on indigenous offshore gas reserves in the Gulf of Thailand. As domestic gas production declines, the country has become increasingly dependent on liquefied natural gas (LNG) imports, exposing the economy to global price volatility. Consequently, the state utility and buyer of last resort, Electricity Generating Authority of Thailand (EGAT), has had to bear significant subsidy costs. By March 2026, EGAT carried more than THB36 billion (USD1 billion) in losses from past energy crises, highlighting the fiscal risks of its continued reliance on fossil fuels.

Despite year-round solar irradiance and decades of policy support mechanisms, tariff premiums (adder tariffs), feed-in tariffs (FiTs), and energy buyback schemes, Thailand’s solar capacity lags behind its peers. As of early 2026, the country had approximately 11.8 gigawatts (GW) of solar capacity. Utility-scale, ground-mounted installations accounted for 8GW, while rooftop solar constituted just 3.6GW.

Thailand’s latest Power Development Plan (PDP) 2026 targets 60% renewable energy by 2050, with solar power playing a key role.¹  Since 2018, solar energy has led incremental renewable energy capacity additions, with ground-mounted deployment accelerating in 2024. However, rooftop solar adoption faces several barriers:

• High capital costs: Setting up a rooftop solar system in Thailand costs approximately USD936 per kilowatt (kW), nearly 50% higher than regional peers such as Pakistan, Malaysia, and Vietnam, due to higher dealer markups, limited service provision, and localized regulatory requirements.
• Unfavorable incentives: The current "Solar for Thai People" net billing scheme offers a buyback rate of THB2.2 (USD0.07) per kilowatt-hour (kWh), which is below retail electricity tariffs averaging around THB3.88/kWh (USD0.12/kWh). This results in extended payback periods between six and seven years for residential installations.
• Restrictive quotas: Tight capacity limits have historically hindered market expansion. 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. While a new 2026 resolution expands the national cap to 500MW, a restrictive 5kW per meter export limit may be implemented, impacting project economics.
• Policy uncertainty and delays: Frequent changes to incentive schemes create uncertainty for consumers, while institutional implementation delays hinder technology rollout.

Pakistan’s recent solar boom provides a valuable case study. Since 2018, the country 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 dynamic buyback rates. These policies 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.

Recommendations for accelerating solar deployment in Thailand

The next few years will be crucial for sustaining Thailand’s rooftop solar growth. High installation costs and changing policy targets undermine incentives to accelerate solar deployment. Thailand should consider adjusting its regulatory framework to improve project economics for end-users through the following measures:

• Transitioning from net billing to net metering would allow households to offset electricity consumption at retail rates, reducing payback periods to approximately four years.
• Offering higher buyback rates could lead to faster cost recovery for consumers and greater profitability once initial investments are recouped. For instance, a buyback rate of THB3/kWh, rather than THB2.2/kWh, could shorten the payback period to five years under the current net billing scheme.
• Promoting tax rebates by streamlining the recently introduced personal income tax deductions (up to THB200,000) and corporate tax deductions (up to 150%) would lower initial investment barriers.
• Removing strict self-consumption thresholds and system capacity caps to eliminate grid barriers and enable consumer-led clean energy markets to scale. This change would also allow daytime rooftop solar generation to displace expensive gas-fired generation during peak hours, reducing costs for both utilities and consumers.

_{^{1 Bangkok Post. Clean energy the focus of power plan. 26 June 2026.}}