The boom-and-bust cycle of renewable energy is not a new issue for Thailand, having emerged in 2013 when the government announced a plan to support the fledgling sector.
But the latest boom is bigger than previous ones, with many large firms jumping in the sector and pouring investment budgets into renewable projects.
At the beginning of the boom in 2013, the Thai government reviewed its power development plan (PDP), raising the total power generated from renewable energy to 13,927 megawatts by 2036. That is nearly double the 7,500MW of renewable energy produced in 2014.
The sector became more attractive when the new government increased the renewable power-generating capacity goal to 19,000MW by 2036 in a PDP revision, accounting for around 30% of total power consumption.
Back in 2013, many investors believed to have close relationships with the government were granted licences to develop renewable energy projects.
But some by-laws of the City Planning Act and Industrial Works Act did not allow construction of power plants in specific areas, delaying the development of renewable energy in Thailand for nearly two years.
The boom resumed in 2015 when the military government amended several regulations to facilitate renewable energy investment to allow several delayed projects to start construction.
Another obstacle is Thailand's insufficient high-voltage transmission lines to carry renewable power from private power generators to consumers. This delayed the development of renewable power projects further.
High-voltage transmission lines in many areas are scheduled to be upgraded and developed by the Electricity Generating Authority of Thailand (Egat) from 2015-19. Egat expects to spend almost 300 billion baht on the transmission line upgrade, covering 780 kilometres of lines.
The new lines are projected to offer business opportunities to small power-generating firms.
Viraphol Jirapraditkul, a member of the Energy Regulatory Commission (ERC), said it expects to grant new renewable energy development licences for a combined power-generating capacity of more than 1,000MW to private firms. Of the total, 519MW would be for solar farms, about 400MW is for biomass power plants and 140MW from waste-to-power projects. Total investment in renewable energy for this round of licences is worth about 65 billion baht.
"During 2016-17, the renewable energy sector will remain robust, particularly for small and midsized power businesses because of licences due to be granted for capacity of less than 10MW," Mr Viraphol said.
But large power-generating companies, including Ratchaburi Electricity Generating Holding Plc, SPCG Plc, BCPG Plc and Electricity Generating Plc, can also join in the renewable power licence bidding, he said.
Kasikorn Research Center (K-Research) reported capital expenditure on the renewable energy segment during the second half of this year to 2018 would be in the range of 110-150 billion baht. Of the total, some 23 billion baht is to be allocated for solar farm projects.
K-Research estimated solar power, biomass and waste-to-energy projects would generate more new businesses.
The boom is expected to spread to other countries in Asia-Pacific, ranging from Myanmar to Australia and Japan, where people are concerned about the environment and climate change.
The frenzy in renewable energy investment has encouraged companies in other sectors to diversify their business.
SET-listed Super Block Plc, a building material maker, switched its focus from construction materials to renewable energy in 2013 by spinning off major assets and setting up its wholly owned Super Block Energy Group (Super). Super is now recognised as one of Thailand's fastest growing businesses in this sector.
Most of Super's renewable energy projects came from acquisitions and mergers with existing renewable energy developers who were granted licences since 2010 but had construction delayed. Super had power-generating capacity of 30MW in its first year of operation.
Jormsup Lochaya, the company's board chairman and managing director, said Super planned to increase capacity to 1,000MW by the end of this year and 2,000MW by next year. It is looking for opportunities in Japan and is in talks to start a business.
"We strongly believe in renewable energy," he said. "That's why we spun off our building material assets with full service to renewable energy from our engineering, procurement and construction business."
TPCH Power Holding, the MAI-listed power business arm of Thai Polycons Plc (TPOLY), plans to expand its power-generating capacity to 350MW by 2021, up from 20MW.
Managing director Cherdsak Wattanavijitkul said the capacity expansion will focus on renewable power from biomass, waste-to-energy and hydropower both domestically and overseas.
Since TPOLY diversified from the construction business to the power sector in 2013, it has 11 power plant projects on hand with total capacity of 141MW.
TPCH recently conducted a feasibility study to develop a hydropower plant in Laos with a capacity of 100MW.
Mr Cherdsak said the 1.1 billion baht raised from its initial public offering and bank loans would finance its capital expenditures.
"Our debt-to-equity ratio is below one time, so we are in a strong position to ask for additional loans," he said.
TPCH recently received three licences from the ERC to develop biomass power plants via its projects dubbed TPCH 1, TPCH 2 and TPCH 5 with a combined capacity of 26.1MW. The company was one of four winners out of 89 applicants.
But the Energy Policy and Planning Office has warned investors, especially small investors, to be cautious about buying shares in listed renewable energy companies because the boom in the sector could lead to speculation as small renewable power firms resort to tactics to make their share prices unrealistically high.