Move expected to fuel solar-panel industry

Economy July 24, 2013 00:00

By Watcharapong Thongrung,

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Investment in solar panels and related businesses is set to boom after the National Energy Policy Council last week revised the target for overall solar power to 3 gigawatts from 2GW and the 25-year feed-in tariff (FIT) for purchasing rooftop solar panels

Anuson Atilaksana, general manager of SMA Solar (Thailand), the distributor of inverter equipment, said the long-awaited announcement of the attractive FIT would draw a great number of producers and pave the way for growth of the solar-panel and related businesses.
The council raised its target for non-fossil-fuel energy sources to 13.9GW from 9.2GW under the revised Alternative Energy Development Plan (2012-21). It endorsed the revised targets of wind power to 1,800 megawatts from 1,200MW, solar power to 3GW from 2GW, biomass to 4.8GW from 3.6GW, garbage-based power to 400MW from 160MW, biogas to 3.6GW from 600MW, and hydropower to 324MW from 1.6GW. Biogas was raised by 3GW from the use of Napier grass, while hydropower was cut drastically.
Of the total increase of solar power by 1,000MW, 200MW will be rooftop panels and 800MW will be from planned community-based solar power plants. 
The council also approved the Energy Ministry’s proposal to offer a 25-year FIT to sellers of rooftop solar panels and community solar power plants. 
The council set the target of power to be purchased from rooftop-panel producers at 200MW this year, of which half will be from households and half from small and medium-sized enterprises. They will start feeding the power grid in December. The FIT ranges from Bt6.16 to Bt6.96 per unit. 
The FIT for community power plants is Bt9.75 per unit during the first three years, Bt6.50 per unit from the fourth to 10th year, and Bt4.50 per unit from the 11th to 25th year. The plants are expected to start feeding power next year. The project is expected to generate income of Bt79.5 million per community throughout 25 years.
Pichai Tinsuntisook, chairman of the Federation of Thai Industries’ Renewable Energy Industry Club, said the council’s approvals would spark growth of the solar-panel-installation business and related subcontractors, while the households that produce rooftop power would also earn revenue. He believes that the government could meet the target of 200MW of rooftop solar power this year.
Dusit Kruangam, chairman of the Thai Photovaltaic Industries Association, estimated that the potential for rooftop solar power could be 500MW versus the targeted 200MW. 
The cost of such systems is Bt80 million per megawatt. The number of companies providing rooftop solar-panel installation is expected to surge to 100 from around 10 at present.
Call for fair treatment 
However, the association will ask the National Energy Regulator to ensure fair treatment to all that want to produce rooftop solar electricity when it draws up the purchase regulations of such power. This is to prevent the hoarding of a great number of the licences by large investors who sell them later to make a profit.
The regulator should hold a public hearing with the relevant parties before announcing the power purchase and set qualifications for the eligible power sellers, what documents are required and who has the right to be the first to sell power, Dusit added. The government should open the business to all who are interested in producing this power, he said.
He said the development of rooftop solar power could be done in two ways: The house owner develops it himself, or he allows a juristic entity to lease the rooftop space to do so. The regulator has to make it clear how many power-production licences one household or juristic person can apply for. This is to prevent a major company from securing licences by the use of nominees and later selling such licences. 
Dusit added that the feed-in tariff for the sale of rooftop solar panels was very attractive and would enable producers to break even within nine to 11 years based on the investment of Bt100,000 per kilowatt of power production.