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Business Models and Financing Options for a Rapid Scale-up of Rooftop Solar Power Systems in Thailand

In: Financing Renewable Energy Development in East Asia Summit Countries A Primer of Effective Policy Instruments

Author

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  • Sopitsuda Tongsopit
  • Sunee Moungchareon
  • Apinya Aksornkij
  • Tanai Potisat

Abstract

Business models and financing options play a large role in driving the expansion of rooftop solar markets. In Thailand, even though there is currently a pause in feed-in tariff support for rooftop solar systems, the market is moving forward with new business models and financing options for solar roofs. After reviewing United States-based business models and financing options, this study documents and analyses four emerging business models and one emerging financing option for customers to invest in rooftop solar systems in Thailand. The business models include roof rental, solar power purchase agreements (PPA), solar leasing, and community solar. The financing option includes two types of solar loans. We analyse the business models in terms of their components and structure, drivers for their emergence, and associated risks. In relation to the buying option, we further demonstrate the financial viability of two models – commercial solar PPA and residential solar leasing. When compared to the buying option, the commercial solar PPA model shows more attractive financial results based on the levelised cost of electricity (LCOE), net present value (NPV), internal rate of return (IRR), and payback period. By contrast, the residential solar leasing model is currently unattractive under the leasing conditions currently being discussed in the market. A number of policy recommendations are proposed in order to build an enabling environment for rooftop solar businesses to thrive. Among them include the implementation of net metering and support for residential-scale solar systems, such as in the form of tax incentives.

Suggested Citation

  • Sopitsuda Tongsopit & Sunee Moungchareon & Apinya Aksornkij & Tanai Potisat, . "Business Models and Financing Options for a Rapid Scale-up of Rooftop Solar Power Systems in Thailand," Chapters, in: Shigeru Kimura & Youngho Chang & Yanfei Li (ed.), Financing Renewable Energy Development in East Asia Summit Countries A Primer of Effective Policy Instruments, chapter 4, pages 79-136, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:chaptr:2014-rpr-27-4
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    2. Li, Yan & Zhang, Qi & Wang, Ge & McLellan, Benjamin & Liu, Xue Fei & Wang, Le, 2018. "A review of photovoltaic poverty alleviation projects in China: Current status, challenge and policy recommendations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 214-223.
    3. Kittner, Noah & Gheewala, Shabbir H. & Kammen, Daniel M., 2016. "Energy return on investment (EROI) of mini-hydro and solar PV systems designed for a mini-grid," Renewable Energy, Elsevier, vol. 99(C), pages 410-419.
    4. Wichsinee Wibulpolprasert & Umnouy Ponsukcharoen & Siripha Junlakarn & Sopitsuda Tongsopit, 2021. "Preliminarily Screening Geographical Hotspots for New Rooftop PV Installation: A Case Study in Thailand," Energies, MDPI, vol. 14(11), pages 1-30, June.
    5. Siripha Junlakarn & Phimsupha Kokchang & Kulyos Audomvongseree, 2022. "Drivers and Challenges of Peer-to-Peer Energy Trading Development in Thailand," Energies, MDPI, vol. 15(3), pages 1-25, February.
    6. Andrea A. Eras-Almeida & Miguel A. Egido-Aguilera & Philipp Blechinger & Sarah Berendes & Estefanía Caamaño & Enrique García-Alcalde, 2020. "Decarbonizing the Galapagos Islands: Techno-Economic Perspectives for the Hybrid Renewable Mini-Grid Baltra–Santa Cruz," Sustainability, MDPI, vol. 12(6), pages 1-47, March.
    7. Chaianong, Aksornchan & Tongsopit, Sopitsuda & Bangviwat, Athikom & Menke, Christoph, 2019. "Bill saving analysis of rooftop PV customers and policy implications for Thailand," Renewable Energy, Elsevier, vol. 131(C), pages 422-434.
    8. Chawin Prapanukool & Surachai Chaitusaney, 2020. "Designing Solar Power Purchase Agreement of Rooftop PVs with Battery Energy Storage Systems under the Behind-the-Meter Scheme," Energies, MDPI, vol. 13(17), pages 1-18, August.
    9. Methee Srikranjanapert & Siripha Junlakarn & Naebboon Hoonchareon, 2021. "How an Integration of Home Energy Management and Battery System Affects the Economic Benefits of Residential PV System Owners in Thailand," Sustainability, MDPI, vol. 13(5), pages 1-20, March.
    10. Schleich, Joachim & Tu, Gengyang & Faure, Corinne & Guetlein, Marie-Charlotte, 2021. "Would you prefer to rent rather than own your new heating system? Insights from a discrete choice experiment among owner-occupiers in the UK," Energy Policy, Elsevier, vol. 158(C).
    11. Suntiti Yoomak & Theerasak Patcharoen & Atthapol Ngaopitakkul, 2019. "Performance and Economic Evaluation of Solar Rooftop Systems in Different Regions of Thailand," Sustainability, MDPI, vol. 11(23), pages 1-20, November.

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