Solar scheme promises savings, but at what cost?

The government's Solar for the People scheme offers households subsidies of up to 50,000 baht to install solar power systems, but consumers should weigh installation costs, eligibility requirements and potential savings before signing up.

The government aims to extend the programme to one million households. Solar panels can be installed on rooftops, on the ground or on floating structures, but the subsidy will not cover the full installation cost. Whether the investment pays off depends largely on household electricity consumption, property suitability and financing costs.

Who is eligible?

The scheme is open to Thai nationals whose names match those registered against household electricity meters. Each person or meter can receive the subsidy only once.

Eligible households can install systems with capacities of 5-10 kilowatts through the Metropolitan Electricity Authority (MEA), Provincial Electricity Authority (PEA) or contractors registered with either agency.

State welfare card holders can also participate, but must forgo their 300-baht monthly electricity bill subsidy for 20 years.

Registration runs from Oct 27 to Jan 31, 2027. Households taking out loans must complete the disbursement process by Dec 31, 2027.

How much does it cost?

The standard package for a 5kW single-phase system is capped at 140,000 baht, including VAT. After the maximum 50,000-baht subsidy, households would pay the remaining 90,000 baht.

The package covers site surveys, system design, installation, grid connection, permits and after-sales service. It also includes a seven-year installation warranty, fire insurance and annual panel cleaning for seven years.

However, batteries, additional roof structures, upgrades to existing electrical systems and work beyond basic installation are excluded.

The published information does not specify a standard price for a 10kW system, so households considering a larger installation should request a detailed quotation.

How much can one save?

Savings depend on system capacity and how much electricity a household uses during daylight hours.

The MEA estimates that a 5kW system could reduce monthly electricity bills by 1,800-2,200 baht, while systems ranging from 5-10kW could generate savings of about 2,200-4,400 baht.

The PEA estimates that a 5kW system could support two refrigerators, four air conditioners and 25 light bulbs. A 10kW system could support four refrigerators, eight air conditioners and 50 light bulbs.

These are indicative figures, not guaranteed savings. Actual results depend on electricity consumption, installation conditions and the amount of power generated.

Households can also sell surplus electricity to the MEA or PEA at 2.20 baht per unit, subject to the applicable arrangements. For households using loans, revenue from surplus power sales will first go towards reducing the loan principal, with any remaining amount returned to the household.

The People's Party has proposed replacing the fixed 2.20-baht purchase rate with a 1:1 net metering system, under which each unit of electricity supplied to the grid would be credited against one unit drawn from it.

The party argues that this would give households a stronger incentive to invest in solar power and encourage wider adoption without relying as heavily on direct government subsidies.

Can loans cover the cost?

The Government Savings Bank, Government Housing Bank and Bank for Agriculture and Agricultural Cooperatives are among the participating lenders.

Under an illustrative financing arrangement provided by the Finance Ministry, a household buying a 140,000-baht system could borrow the full amount to pay the installer. The 50,000-baht subsidy would then be deducted from the loan principal, leaving 90,000 baht to repay.

At an annual interest rate of 2.5% over seven years, monthly repayments would be about 1,200 baht.

Households should compare their monthly repayments with expected electricity savings and income from surplus power sales. Savings may not cover instalments if consumption is low or most electricity is used at night.

Is it suitable for everyone?

Not necessarily. Daytime electricity consumption is a key factor in determining whether a solar installation is worthwhile.

Households that use air conditioning and other appliances during the day are more likely to benefit directly from solar generation. Those that are mostly empty during daylight hours may use less of the electricity produced.

A battery can store surplus electricity for use at night, but it is not included in the standard package and would add to installation costs.

Roof condition, available space and exposure to sunlight also affect suitability. A site survey can help determine the system capacity that can be installed safely and efficiently.

Price controversy

Questions have been raised over pricing transparency after Treerat Sirichantaropas, a Democrat Party energy adviser, highlighted a discrepancy between the amount sought from contractors and the price advertised to consumers.

Mr Treerat posted on Facebook a PEA survey of contractors in its Northern Region asking whether they would accept 110,000 baht, excluding VAT, to install a 5kWp single-phase system.

He compared this with an MEA advertisement offering a similar installation for 140,000 baht, including VAT, questioning who would benefit from the 22,300-baht difference after VAT was taken into account.

The comparison has raised questions about procurement costs and whether households are getting value for money.

Collusion concerns

Another concern is whether the scheme's registration requirements could give larger companies an advantage over smaller solar installers.

Contractors must provide a 50,000-baht guarantee for each installation, refundable once the system is connected to the MEA or PEA grid. They must also provide a separate 10,000-baht guarantee covering seven years of maintenance.

Small operators may struggle to meet these financial and administrative requirements. An installer in Dan Khun Thot district of Nakhon Ratchasima said the guarantees could prevent businesses with limited capital from joining the scheme.

The installer called on the government to ease the requirements and give smaller operators, particularly those serving rural communities, a fairer opportunity to participate.

Prime Minister Anutin Charnvirakul said the government must ensure the criteria are fair while maintaining safety standards. Both installers and equipment must meet the required standards because the systems will be connected to household electricity networks, he said.

Tax deduction alternative

Households may opt for a separate tax deduction of up to 200,000 baht for actual equipment and installation expenses under a tax measure running until Dec 31, 2028.

However, the tax deduction cannot be combined with the 50,000-baht subsidy. Households should compare the potential tax benefit with the direct subsidy before deciding which option offers greater savings.

How can households check installers and equipment quality? Households should use contractors registered with the MEA or PEA and check their technical expertise, engineers' professional licences and relevant training.

Solar equipment must comply with International Electrotechnical Commission (IEC) and Thai Industrial Standards (TIS) requirements.

Before signing a contract, households should request the brands and models of the panels, inverters and other equipment, together with certification documents and written warranty terms.

They should also distinguish between the package's seven-year installation warranty and warranties covering individual components, which may have different terms.

End-of-cycle plan

Solar panels and related equipment will eventually need to be replaced or disposed of.

The Industry Ministry has been assigned responsibility for developing disposal measures, but the published scheme information does not specify a collection, recycling or disposal system.