Solar leader SPCG cuts 2020 growth estimate

Solar leader SPCG cuts 2020 growth estimate

SPCG's Solar Power Korat 1 in Nakhon Ratchasima will see adder tariffs expire this year. So far SPCG has invested in 36 solar farms in Thailand with a total capacity of 260MW.
SPCG's Solar Power Korat 1 in Nakhon Ratchasima will see adder tariffs expire this year. So far SPCG has invested in 36 solar farms in Thailand with a total capacity of 260MW.

SET-listed SPCG, the largest solar farm operator by capacity, is slashing its 2020 revenue estimate, expecting growth of only 3.3% because of the pandemic.

Earlier this year, before the outbreak spread worldwide, the company estimated 25% growth to 6.7 billion baht, fuelled by its new businesses. At this point, SPCG expects revenue to increase to 5.5 billion baht this year.

SPCG chief executive Wandee Khunchornyakong Juljarern said the pandemic caused several prospective customers to delay installing solar photovoltaic (PV) rooftops.

The delay will be only temporary and "once the pandemic calms down, purchase orders will return to normal," she said.

Solar PV rooftops are one of SPCG's new businesses launched to maintain SPCG's revenue growth after an adder tariff of eight baht per kilowatt-hour, granted to the firm's 36 solar farms, begins to expire from this year until 2024.

The adder tariff, which was introduced by the government during 2008 and 2009, is aimed at encouraging investors to build solar farms by adding an eight-baht tariff to electricity prices, enabling SPCG to sell electricity at 11.5 baht per unit.

The adder tariff will be applied only for the first decade to the solar power business.

SPCG, the first Thai firm pioneering in solar farm development, started solar farm operations since 2010.

Once the adder tariff expires, the electricity price will be calculated on a normal tariff of four baht per KwH.

The company's main revenue has come from 36 solar farms nationwide, with combined capacity of 260 megawatts.

SPCG plans to rack up money from the PV rooftop business for the household segment, currently overseen by the wholly-owned Solar Power Roof (SPR), which joins hands with Home Product Center, a modern trade operator.

Last year SPCG also set up a MSEK joint venture with three firms to enter a larger corporate rooftop market.

The PV rooftop business accounted for 17% of 5.3 billion baht in total revenue last year while 80% came from 36 solar farms and 3% from company's services.

Ms Wandee said her company plans to allocate capital expenditure worth 14 billion baht this year, 10 billion baht of which will go to new solar energy development projects overseas.

The pandemic prompted SPCG to cut its spending by 300 million baht in the second quarter.

The company remains firm on its plan to expand solar power capacity to 3,000MW by 2037.

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