Thailand Launches Public Hearing on Draft Act to Promote Solar Power Usage

Recently, Thailand’s Department of Alternative Energy Development and Efficiency (“DEDE”) announced that they are to hold a public hearing on the draft Act on Promotion of Solar Power Usage (the “Draft Act”).

Key takeaways

• Simplification of Regulatory Processes: The Draft Act aims to promote solar PV energy system installations by simplifying regulatory procedures, reducing unnecessary expenses and complex documentation.
• Benefits for Commercial and Industrial Owners: The new law will benefit commercial and industrial building owners who install solar PV systems for self-consumption, as well as developers offering build-transfer-operate services as it streamlines the regulatory procedures.
• Support for Sustainable Energy Goals: The Draft Act is designed to address rising electricity prices, reduce energy costs, cut fuel imports, improve access to clean energy, lower carbon dioxide emissions, and align with Thailand's national strategy for sustainable growth.

Draft Act to Promote Solar Power Usage

As Thailand looks to reduce energy costs for both individuals and businesses, the Draft Act intends to cut down on the procedural steps required under current legislation, which can sometimes result in unnecessary expenses and complex docuentation. Recently, the government introduced a Ministerial Regulation that eliminates the need to obtain a factory license (commonly known as a Ror. Ngor. 4) from the authorities for all solar rooftop power generation installations located outside of industrial estates, regardless of their production capacity. In contrast, the Draft Act is not limited to just rooftop solar power facilities.

In line with Thailand’s aim to be carbon neutral by 2050, the government is emphasizing the growth of renewable energy, including solar power. Despite the progress, only 15 percent of Thailand's energy currently comes from renewable sources, indicating that there is still significant room for improvement and investment throughout the country. Based on the draft Power Development Plan (PDP) 2024–2037 which is still yet to be fully finalized, renewable energy is expected to account for 51 percent of total electricity generation, with solar energy contributing 16 percent. This marks a strong increase in the share of clean energy sources in the electricity sector from 36 percent under the PDP 2018 (Revision 1) to 51 percent.

The Thai government's increasing measures to expand renewable energy projects and harmonize various rules and regulations represent a positive step forward in Thailand’s journey to become carbon neutral. By proactively expanding renewable energy sources in its power mix, Thailand will continue to be an attractive destination for foreign direct investment.

Potential benefits to commercial and industrial building owners

The new law in its current form should benefit commercial and industrial building owners who wish to install solar PV systems for self-consumption. Additionally, it will benefit developers offering build-transfer-operate services (such as EPC and O&M models, rather than PPA models).

As Thailand aims to address the challenges of rising electricity prices, reduce energy costs, cut down on fuel imports, improve public access to clean energy, lower carbon dioxide emissions, and align with the national strategy for sustainable and eco-friendly growth, it is anticipated that the Draft Act will support the country in achieving these goals.

Overview of the Draft Act

The Draft Act consists of the following five sections:

• Section 1: General provisions
• Section 2: Installation of solar power systems
• Section 3: Control and disposal of solar power systems
• Section 4: Administrative duties
• Section 5: Penalties

Please find below a brief overview of each section of the Draft Act.

Section 1: General provisions

Section 1 of the Draft Act outlines the general provisions, emphasizing the enhanced promotion of solar power system installations in a more efficient and streamlined manner.

Section 2: Installation of solar power systems

The Draft Act applies only to solar power system installations for self-consumption. However, it allows the sale of electricity to a governmental utility (i.e., the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority, the Provincial Electricity Authority, or organizations designated by the Minister).

According to the Draft Act, if there is any sale, distribution, exchange, or provision of electricity, it must comply with the purchase rates and criteria announced by the Director-General and approved by the Minister.

It is important to note that, according to the intention of the Draft Act as announced by the DEDE in the hearing materials on 26 March 2025, all license requirements for installation of solar power systems, including an approval for grid synchronization, are exempted. However, the installer must notify the DEDE at least 30 days prior to the installation of the solar PV system.

Section 3: Control and disposal of solar power systems

To ensure the safe collection, disposal, or destruction of solar energy system equipment, such activities must follow the criteria set by the DEDE.

For businesses that are involved in the collection and/or disposal of solar energy equipment, they must be permitted by the Director-General of DEDE to carry out such activities. Further, licensed electronic waste disposal facilities are considered authorized establishments for solar energy system equipment disposal, and they must notify the Director-General and comply with the relevant criteria.

Section 4: Administrative duties

According to the Draft Act, officials have the relevant authority to access premises for inspecting the installation of solar energy systems to ensure that they are in compliance with the Draft Act. The primary objective is to ensure that the installation of solar energy systems is conducted safely and without any hazards.

Section 5: Penalties

Further, the Draft Act also details potential penalties for acts that violate the Draft Act.

Activities that do not comply with the provisions of the Draft Act can result in imprisonment of up to three years and/or fines up to THB 100,000.

Next steps

In conclusion, the Draft Act is structured into five sections: (1) general provisions; (2) installation of solar power systems; (3) control and disposal of solar power systems; (4) administrative duties; and (5) penalties.

It aims to promote efficient solar power installations, regulate the sale and distribution of electricity to the governmental utility, ensure safe disposal of solar equipment, empower officials to inspect installations for compliance, and impose penalties for violations, thereby supporting Thailand's sustainable energy goals.

The Energy and Infrastructure team at Hunton will continue to monitor future developments to determine whether this law will expand to include or benefit developers who provide build-operate-transfer model (i.e., PPA model).

If you require any further information on the Draft Act, please do not hesitate to reach out to the Energy and Infrastructure team at Hunton.

This article was authored by Chumbhot Plangtrakul, Thaphanut Vimolkej, Jidapa Songthammanuphap, and Joseph Willan.