Thailand’s solar panel tax cut scheme to save households on bills

A new tax reduction scheme aimed at encouraging households to install rooftop solar panels is expected to be finalised by mid-year, announced the Department of Alternative Energy Development and Efficiency (DEDE). The initiative seeks to lower electricity bills and reduce carbon dioxide emissions.

Households that purchase solar panels with a power generation capacity of less than 10 kilowatts, costing under 200,000 baht, will be eligible for the programme, according to DEDE Director-General Wattanapong Kurovat. The Revenue Department will determine the tax reduction calculation.

The DEDE anticipates that 90,000 households will join the scheme between this year and next. The programme, which requires a budget of 20.2 billion baht, aims to cut electricity consumption by 585 million kilowatt-hours annually.

Wattanapong highlighted that this reduction could lead to a decrease in Thailand’s liquefied natural gas (LNG) imports by 9,000 tonnes per year, saving 2.1 billion baht and reducing greenhouse gas emissions by 0.28 million tonnes. Gas accounts for 60% of the fuels used for electricity generation in the country.

Thailand’s domestic gas supply is insufficient, necessitating LNG imports, which are subject to price fluctuations. A surge in global LNG prices in 2022, following Russia’s invasion of Ukraine, led to higher electricity bills in Thailand.

The power tariff, which influences power bills, could have risen to 6 baht per kilowatt-hour in the first half of 2022 if the Electricity Generating Authority of Thailand (EGAT) had not been instructed to subsidise electricity prices, easing the financial burden on households and businesses.

However, this subsidy resulted in EGAT recording a significant loss of nearly 100 billion baht.

Although LNG prices have stabilised, electricity prices remain elevated partly due to the ongoing reimbursement of Egat’s losses, which is expected to continue until 2025, according to the Energy Regulatory Commission.

Shifting to solar power could help households reduce their monthly electricity costs.

The tax reduction move has been praised by solar panel distributor New Energy Plus Solutions, citing the scheme’s financial and environmental benefits, reported Bangkok Post.