Partner Bangkok
"By removing this requirement, the Ministry of Industry has effectively lowered the barriers for businesses to adopt large-scale rooftop solar systems."
Here’s a closer look at the implications, challenges, and opportunities arising from this forward-thinking policy.
A Game-Changing Policy for Renewable Energy
Under the previous regulation, rooftop solar systems exceeding 1 MW required a factory licence. This process was often time-consuming, bureaucratically complex and financially burdensome. By removing this requirement, the Ministry of Industry has effectively lowered the barriers for businesses to adopt large-scale rooftop solar systems.
This move aligns with Thailand’s renewable energy ambitions, including the goal of achieving 30% renewable energy in the national energy mix by 2037 and carbon neutrality by 2050. By simplifying the adoption process, the government has created a powerful incentive for businesses to shift toward renewable energy solutions.
Opportunities for Industries
- cost savings and energy independence: for energy-intensive industries such as manufacturing, logistics and agriculture, this regulatory change offers an opportunity to significantly reduce electricity costs. Large-scale rooftop solar systems can offset grid consumption, allowing companies to achieve energy independence while mitigating exposure to fluctuating electricity tariffs.
Industries with large physical footprints, such as factories, warehouses, and retail malls, can maximise the value of their unused rooftop spaces by installing solar panels. Beyond immediate cost savings, these systems offer long-term stability in energy expenses, which is crucial for businesses operating on tight margins; and
- accelerated renewable energy adoption: this amendment makes solar power more accessible to businesses that were previously deterred by regulatory hurdles. As solar energy becomes more cost-competitive, industries such as commercial real estate, food processing, and education are likely to embrace rooftop installations as part of their operational strategy
Key contacts
"The regulatory change is a clear boon for Thailand’s solar sector, paving the way for accelerated growth in rooftop solar installations."
For businesses focused on exports, adopting solar power also helps meet increasingly stringent ESG requirements from international buyers and partners. Companies that integrate renewable energy into their operations will find themselves better positioned to compete in global markets.
Impact on the Solar Industry
The regulatory change is a clear boon for Thailand’s solar sector, paving the way for accelerated growth in rooftop solar installations. Solar developers, contractors and installers stand to benefit from increased demand, particularly from industries looking to transition to renewable energy.
- streamlined project timelines: by removing the licensing step, project timelines for large rooftop solar systems will be significantly reduced. This means businesses can move from planning to installation faster, enabling them to reap the benefits of solar energy sooner;
- market expansion: the policy opens up new opportunities for solar providers to target larger installations that were previously limited by regulatory constraints. With greater flexibility in project sizes, the solar industry can cater to a broader range of clients, from SMEs to large corporations; and
- competitive pricing: with reduced regulatory costs, solar providers can offer more attractive pricing to clients. This affordability will further drive adoption and stimulate healthy competition within the solar sector.
Challenges to Consider
"Businesses adopting rooftop solar systems will also strengthen their own sustainability narratives, appealing to environmentally conscious consumers and investors."
Whilst the amendment is a significant step forward, there are challenges that stakeholders must address to fully realise its benefits:
- grid integration and stability: as more businesses adopt rooftop solar systems exceeding 1 MW, managing the integration of decentralised energy sources into the national grid becomes increasingly important. Effective energy storage solutions and grid infrastructure upgrades will be crucial to ensuring stability;
- quality and safety standards: with the removal of the factory licence requirement, there is a need for alternative regulatory oversight to ensure safety and quality standards. Poorly installed systems could pose risks to businesses and impact the reputation of the solar industry as a whole;
- policy consistency: requent changes in regulations can affect investor confidence. While this amendment is a positive step, the government must ensure a stable regulatory environment to encourage long-term investment in solar and other renewable energy projects; and
- regulatory obligations: though the factory licence requirement has been removed, solar rooftop operators remain subject to several regulatory obligations for electricity production, including energy industry operation licences, controlled energy production permits, and environmental and safety assessments. However, certain exemptions apply when the installed capacity is below a specified threshold or when power is generated at the point of use. Additionally, operators are required to obtain approval for grid connection from electricity authorities before connecting their inverters to the utility grid.
Industries That Stand to Benefit
The regulatory change is expected to generate significant interest across various sectors:
- manufacturing: energy-intensive factories, especially in automotive, electronics, and food processing, can reduce operational costs;
- logistics and warehousing: large warehouses with extensive rooftop space can adopt solar to power their operations;
- commercial real estate: malls, office buildings and hotels can integrate solar energy to reduce expenses and attract eco-conscious tenants and customers;
- agribusiness: cold storage facilities, poultry farms and food processing plants can lower energy costs while supporting sustainability; and
- healthcare: hospitals and healthcare facilities can benefit from 24/7 clean energy supply, reducing operational risks and costs.
"This regulatory shift not only empowers Thai businesses to embrace renewable energy but also strengthens the country’s position as a regional leader in sustainability."
Supporting Thailand’s Carbon Neutrality Goals
This amendment reinforces Thailand’s commitment to sustainability. By making large-scale solar installations more accessible, the government is encouraging industry to contribute to the nation’s carbon neutrality by 2050 goal. Businesses adopting rooftop solar systems will also strengthen their own sustainability narratives, appealing to environmentally conscious consumers and investors.
Conclusion: A Win for Businesses, Solar, and Sustainability
Thailand’s decision to exempt rooftop solar installations exceeding 1 MW from factory licence requirements removes significant barriers to solar adoption, enabling businesses to save costs, achieve energy independence and contribute to environmental goals. At the same time, the solar industry stands to benefit from increased demand, faster project timelines and expanded market opportunities.
Though challenges such as grid integration and quality assurance remain, the potential benefits far outweigh the risks. This regulatory shift not only empowers Thai businesses to embrace renewable energy but also strengthens the country’s position as a regional leader in sustainability.
As industry, developers and policymakers collaborate to implement this policy effectively, the future of solar energy in Thailand looks brighter than ever.
Key contacts
Partner Bangkok
Senior Associate Bangkok
Associate Bangkok
