Solar rooftop adopters set to win a tax break
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Solar rooftop adopters set to win a tax break

Scheme seen arriving by middle of the year

An aerial photograph shows rooftop solar panels installed by New Energy Plus Solutions.
An aerial photograph shows rooftop solar panels installed by New Energy Plus Solutions.

A new tax reduction scheme for households that install rooftop solar panels is expected to be finalised by mid-year in an effort to reduce electricity bills and carbon dioxide emissions, says the Department of Alternative Energy Development and Efficiency (DEDE).

Any household that purchases solar panels with a power generation capacity of less than 10 kilowatts at a cost of less than 200,000 baht can participate in the programme, said department director-general Wattanapong Kurovat.

The tax reduction calculation will be determined by the Revenue Department, he said.

The DEDE expects 90,000 households to participate in the programme between this year and next, said Mr Wattanapong.

The scheme, which requires a budget of 20.2 billion baht, can reduce electricity consumption by 585 million kilowatt-hours per year, he said.

This means Thailand could decrease imports of liquefied natural gas (LNG) by 9,000 tonnes per year at a cost of 2.1 billion baht, reducing greenhouse gas emissions by 0.28 million tonnes, said Mr Wattanapong.

Gas comprises 60% of all fuels used for electricity generation in the country.

An insufficient domestic gas supply requires importing of LNG, though the price of LNG tends to fluctuate.

A surge in global LNG prices in 2022 following Russia's invasion of Ukraine was blamed for costlier electricity bills in Thailand.

The power tariff, which is used to calculate power bills, would have soared to 6 baht per kilowatt-hour (unit) in the first half of 2022 if the Electricity Generating Authority of Thailand (Egat) was not instructed to subsidise electricity prices to reduce the financial burden on households and businesses.

But the move caused Egat to record a huge loss amounting to almost 100 billion baht.

Though LNG prices have stabilised, electricity prices remain high partly because power bills are reimbursing Egat for its losses until 2025, according to the Energy Regulatory Commission.

If more people shift to solar power, they can reduce the cost of their monthly electricity bill.

New Energy Plus Solutions Co, the distributor of solar panels made by Shanghai-based Jinko Solar Holding, applauded the latest tax reduction scheme for its financial and environmental impacts.

A similar tax reduction programme was implemented in the US, where people are entitled to a tax reduction equal to the price of the rooftop solar panels they purchase, said Treerat Sirichantaropas, chief executive of New Energy Plus.

In another development, the DEDE is planning to introduce a separate tax break for companies buying electrical appliances certified as power-saving, also known as Label No.5.

The cost of such appliances can be used to request a tax reduction for a period of five years, said Mr Wattanapong.

This tax incentive is expected to reduce accumulated electricity usage over five years by 29,020 units a year, and cut LNG imports by 203 million British thermal units, worth 106 billion baht, he said.

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