Reforming Solar Incentives Can Accelerate Rooftop Solar Growth and Reduce LNG Dependence in Thailand

Thailand could accelerate rooftop solar adoption, reduce reliance on imported liquefied natural gas (LNG) and ease pressure on electricity costs by reforming its current solar policy framework, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

The report, published on August 19, 2026, argues that stronger financial incentives and fewer regulatory barriers could encourage households and businesses to invest in rooftop solar, while improving consumer energy independence and reducing the financial burden on state-owned utilities.

Thailand's power sector remains heavily dependent on natural gas, which accounts for around 66% of electricity generation. As domestic gas production declines, the country has increasingly turned to LNG imports, exposing the power sector to global fuel price volatility and potential supply disruptions.

The financial impact has already become significant. By March 2026, the Electricity Generating Authority of Thailand (EGAT), the country's state-owned utility and buyer of last resort, had accumulated more than THB36 billion (US$1 billion) in losses linked to previous energy crises.

Rooftop Solar Growth Remains Limited

Thailand had approximately 11.8GW of installed solar capacity as of early 2026, according to the report. Ground-mounted utility-scale projects accounted for around 8GW, while rooftop solar represented approximately 3.6GW.

Despite Thailand's strong solar resources, rooftop deployment has remained relatively limited. IEEFA identifies high installation costs, low electricity buyback rates, restrictive capacity quotas and policy uncertainty as key barriers.

Rooftop solar installation costs in Thailand are estimated at around US$936/kW, nearly 50% higher than in regional markets including Pakistan, Malaysia and Vietnam.

Under Thailand's current "Solar for Thai People" net billing scheme, excess electricity is purchased at THB2.2/kWh (US$0.07/kWh), compared with average retail electricity tariffs of approximately THB3.88/kWh (US$0.12/kWh).

This results in residential rooftop solar payback periods of around six to seven years, reducing the financial attractiveness of installations.

Capacity restrictions have also constrained market growth. The 90MW residential quota introduced under Thailand's 2019 net billing scheme, originally intended to remain available until 2030, was fully utilized by 2024.

Policy Reform Could Shorten Payback Periods

IEEFA recommends that Thailand reconsider its current rooftop solar compensation mechanism and move from net billing toward net metering.

Under a net metering system, consumers could offset their electricity consumption at retail electricity rates, potentially reducing payback periods to approximately 5.5 years for a 5kW residential system and 4.5 years for a 10kW system.

The report also recommends:

• Increasing rooftop solar buyback rates

• Streamlining tax incentives for households and businesses

• Removing restrictive solar capacity limits

• Reviewing self-consumption thresholds

• Accelerating deployment of solar-plus-battery energy storage systems

• Creating a more predictable long-term policy framework

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Pakistan Offers a Regional Example

IEEFA points to Pakistan as an example of how supportive policies can accelerate rooftop solar adoption.

Since 2018, Pakistan has deployed approximately 38GW of solar capacity, supported by reduced trade barriers, fewer capacity restrictions and a more attractive net metering framework.

The combination of high electricity prices, falling solar equipment costs and supportive policies reduced the payback period for some net-metered systems to less than two years, contributing to more than 350,000 solar connections by the end of 2025.

IEEFA argues that Thailand could adopt similar measures while developing its domestic solar installation and services industry.

Solar-Plus-Storage Could Strengthen Energy Security

The report also highlights battery energy storage systems (BESS) as an important component of Thailand's rooftop solar expansion.

Combining rooftop PV with battery storage would allow consumers to store excess daytime generation and use it during periods of higher electricity demand, increasing self-consumption and reducing dependence on grid electricity.

For Thailand, greater adoption of rooftop solar and storage could therefore serve two purposes: reducing exposure to volatile LNG prices while giving consumers greater control over their energy costs.

IEEFA concludes that removing financial and regulatory barriers could help Thailand accelerate distributed solar deployment, strengthen energy security and reduce the long-term pressure of fossil-fuel dependence on the country's electricity system.