Journey through Thailand and you’ll notice shimmering photovoltaic panels laid out in neat rows across the countryside, soaking up sun and producing electricity that feeds into the national public utility grid. These are solar farms, and they’re quickly sprouting up across the country.
By 2020, the Thai government forecasts that 20 percent of the country’s energy production will come from renewable resources, including 500 megawatts of solar. For a developing nation, these are ambitious goals.
You can’t compare Thailand’s nascent solar industry with long standing solar generation world leaders like Germany, which have decades of experience. But the government’s projections are “quite feasible” notes Christopher Sunsong, an analyst at research company Solarbuzz which studies the global solar market. “Thailand has generated an enormous amount of interest in the solar community,” he adds.
Follow the money
Tax incentives and favorable “feed-in” tariffs make solar power generation a good investment for both local Thai developers and foreign companies. “There’s a lot of money out there looking to invest in solar, and Thailand is an attractive place for that,” says Christopher Greacen, a consultant to the World Bank on solar energy production who has worked in Thailand.
Money is indeed pouring in. Renewable energy investment in Thailand rose a whopping 320 percent in one year to $700 million in 2010. Large-scale solar projects were the biggest beneficiary of that investment, according to a Bloomberg New Energy Finance report.
Thailand isn’t alone in trying to go solar. Total global investment in renewable power and fuels is on the rise, hitting $211 billion in 2010—up 32 percent over 2009—and five times more than achieved in 2004, according to Bloomberg.
Thailand needs renewables because its commercial energy needs are increasing.
Surprisingly, more than $72 billion of that was in developing countries like Thailand—the first time these up-and-coming economies in the developing world outpaced richer countries in renewable investment.
Solar gets cheaper
Solar is gaining in popularity for a number of reasons. The price of photovoltaic panels, which capture the sun’s rays, has fallen by as much as 60 percent since 2008. That lowers startup costs, which is especially important for Thai companies that are entering the sector. Concern about global warming and pollution are also driving interest in safe, renewable energy.
Like other developing economies, Thailand needs renewables because its commercial energy needs are increasing, especially in cities. Long hours of strong sunshine allows peak photovoltaic generation during the day, corresponding with peak demand in cities like Bangkok where massive air-conditioning systems keep the capital’s residents cool.
Here comes the sun
Unlike other renewables such as biomass, which is derived from plants and animals, “you don’t have to worry about the raw material because the sun is already here,” says Krisada Chongphaibulpatana, Vice President of Sales and Marketing for Bangkok Solar. “The sun comes every day.” In fact, you can expect sunshine for an average of five hours a day in Thailand.
Solar Power Company is planning to have 18 solar farms by 2013.
What’s more, global foreign companies are increasing their investments and activities in Thailand. General Electric is also eyeing the country: GE Energy plans to introduce its cadmium telluride thin-film photovoltaic technology to the Thai solar energy market within the next two years.
Thai companies are jumping on the bandwagon. Bangkok Solar operates nine solar farms and intends to add two to three a year over the next few years. Another Thai firm, Solar Power Company, has five solar farms up and running and is planning to have 18 by 2013. With even more solar farms in the works, “we are moving in the right direction,” Chongphaibulpatana believes.
There are challenges, to be sure: political instability—a coup in 2006 was followed by political unrest in 2010—has taken a toll on the economy. Yet despite the hiccups, successive governments remain committed to increasing renewable energy resources.
A bright future
Clearly, Thailand is charting an ambitious and fast track to expand its renewable energy resources. The infrastructure is in place, investors are interested, and the first solar farms are feeding the country’s energy needs. Given that Thailand is still heavily reliant on imported oil, going solar is an economic imperative.
The nation is not only on course to reach its goal but it may also inspire others. “Thailand is already ahead,” Greacen observes, “and it could become a great model for other countries.”
Illustration by Dan Matutina