Thailand’s solar rooftop developments
From self-consumption through rent-a-rooftop schemes to grid-connected solar rooftop developments and blockchain-based peer-to-peer energy trading
Self-consumption: Solar panels installed on the own rooftop for self-consumption “behind-the-meter” are widely popular in Bangkok as well as the various production plants in the Eastern Economic Corridor. The owners of factories, buildings, and residences have installed self-financed C&I solar rooftops to produce their own electric power and cut back on expenses. Reductions in technology prices and innovative financing structures help to make government subsidy programs unneeded and obsolete and made photovoltaics competitive with fossil fuels energy sources.
Third-party ownership: The existing legal environment allows solar service providers to agree with commercial and industrial rooftop owners to sell and construct solar rooftop panels and enter into a long-term service contract to keep the panels operational. The developer needs to have the technical know-how and competence to erect and operate the solar facilities during the lifetime of the contractual arrangements. In addition, the whole venture has to be financed by the developer.
Private PPA: Alternatively, a solar developer can rent the rooftop to install its own solar panels to build, own, and operate the system (BOO) and produce electricity in a third-party ownership model. The electricity is sold to the rooftop owner under a private power purchase agreement. The license requirements (inclusive Regulated Energy Production License) for such a venture as well as BOI investment promotion options have to be taken into consideration.
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— Bangkok Lawyer (@bangkoklawyer) April 3, 2020
Grid-connection: Previous governmental announcements predicted to allowed to sell electricity, generated by privately owned solar rooftops, to state utilities. Solar rooftop development installations on commercial, industrial, governments, public institutions (e.g., schools and hospitals), residential, and any other type of buildings are going mainstream with the introduction of non-utility offtake deals and the opening of the energy market to sell rooftop electricity on demand into the grid.
Peer-to-peer energy trade: Thailand plans to open its energy market to allow private electricity trading. The traditional power distribution is transformed from large power plants into a decentralized blockchain system utilizing the national electricity grid as the submission line. Details are described at “Prosumer, blockchain and the Thai power grid”.
Latest update: The 100 MW household solar rooftop scheme seems to be gaining momentum, at least for 30MW developments in Bangkok, Nonthaburi, and Samut Prakarn areas.
Professional service offer on solar energy projects
PUGNATORIUS Ltd. is the Bangkok-based specialist provider of legal services and tax advice on foreign investments in Thailand’s manufacturing and service industries as well as property acquisitions and developments. Concerning renewable energy, the law firm is one of the experienced and well-reputed legal service providers, especially in the solar energy sector. Its lawyers have been the speaker on various international renewable energy conferences and are frequently quoted in corporate press releases, magazine articles, and Thailand country reports.
Investment structure: For solar rooftop developments, the law firm can advise and assist on the common legal and business structures and commercial contracts to develop solar energy on commercial and industry rooftops. It can define the requirements to identify attractive industries and preferential business partners. PUGNATORIUS Ltd. can also provide you with an expert opinion, whether the offered solar development model is reasonable and sustainable.
Partners: The law firm advises in the negotiation with the rooftop owner regarding the overall package of agreements. This includes power purchase agreements, sale or rent contracts, as well as other supporting contracts. It also advises on the selection and contracting with EPC and O&M providers on the contractual relationship and business dealings. PUGNATORIUS Ltd. has in its possession customary work products and can advise on preferential contractual arrangements.
Licensing: The Bangkok law firm assists in applying for licenses and approvals, BOI investment promotion, if applicable, and financing issues. It is well familiar with the tax structuring of renewable energy transactions and the use of offshore companies to reduce the overall tax burden for the project.
Business interests: PUGNATORIUS Ltd. can represent the interests of an individual investor in a solar transaction, or the interests of the developer entity throughout the life of the project. The overall service includes the formation and licensing of companies, the drafting of commercial contracts, and supporting issues like visa and work permit related tasks.