Rooftop solar reform could curb Thailand’s rising LNG import bills

Key points

• Thailand’s rooftop solar growth is being held back by high costs, low buyback rates, restrictive quotas and policy uncertainty.
• Rooftop solar could help Thailand reduce its reliance on imported LNG as domestic gas production declines.
• Thailand aims to generate 60% of its electricity from clean energy by 2050, double its previous target.
• Pakistan’s solar boom offers lessons for Thailand, showing both the benefits of rapid rooftop solar growth and the challenges it can create for the wider power system.

Fixing Thailand’s rooftop solar rules could slash its liquefied natural gas (LNG) imports, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

As domestic gas production declines, the country has become increasingly dependent on imported LNG, exposing its economy to global price volatility and supply disruptions. Among Asean nations, Thailand’s economy has the highest dependence on oil and gas imports, which account for more than 10% of its gross domestic product (GDP).

The report comes as Thailand seeks to reduce its reliance on imported gas and accelerate its shift towards renewables, as a direct result of the fallout from the US-Israel war on Iran. The government plans to target 60% of electricity generation from clean energy sources by 2050 – double its previous goal – as it seeks to make the power system more resilient to external shocks. The updated 25-year power development plan is due to be released in October.

Rising fuel costs have strained the finances of state utility Electricity Generating Authority of Thailand (EGAT), which has had to absorb substantial subsidy costs to keep power affordable. As of March, EGAT had carried over THB 36bn (US$1bn) in losses from past energy crises, IEEFA says, highlighting the fiscal risks of continued dependence on fossil fuels.

“Thailand has significant solar potential, but weak financial incentives and policy uncertainty have constrained rooftop solar deployment. Strengthening the policy framework would allow consumer-led solar adoption to play a greater role in Thailand’s energy transition,” says report author Haneea Isaad, an energy finance specialist at IEEFA.

Solar has led Thailand’s renewable energy capacity additions since 2018, but the majority of installations are ground-mounted solar. Rooftop solar accounted for  3.6 gigawatts (GW) of solar capacity – less than a third of total installed capacity – as of early 2026.

Rooftop solar remains limited by high installation costs, low buyback rates, restrictive quotas and policy uncertainty, says IEEFA.

According to the report, rooftop solar systems in Thailand cost approximately US$936 per kilowatt (kW), nearly 50% higher than regional peers, including Pakistan, Malaysia and Vietnam.

Under Thailand’s Solar for the People initiative, the current buyback rate of THB 2.20 (US$0.07) per kWh for surplus solar electricity sold to the grid is below retail electricity tariffs, which average around THB 3.88/kWh (US$0.12/kWh).

As a result, the payback period ranges from  six to seven years for residential installations, reducing the financial incentive for some households to install rooftop solar.

Tight capacity limits have also delayed consumer adoption. The initial 90-megawatt (MW) residential quota set in 2019 was reached six years ahead of schedule in 2024. While the solar programme cap has since been raised to 500 MW, a restrictive 5 kW-per-meter export limit may be implemented.

“The next few years will be crucial for sustaining Thailand’s rooftop solar growth. The government should consider adjusting its regulatory framework to improve project economics for consumers,” said Isaad.

Replicating Pakistan’s solar expansion – and avoiding the pitfalls

Unlike Thailand, rooftop solar has taken off in Pakistan following the 2022 energy crisis, reducing the country’s reliance on LNG imports and helping it mitigate the impact of the war in Iran, which disrupted oil and gas supplies passing through the Strait of Hormuz.

Since 2018, Pakistan has deployed 38 GW of solar capacity by removing trade barriers, avoiding strict capacity caps and offering attractive buyback rates. Alongside lower solar module prices and high electricity tariffs, these favourable policies reduced payback periods to under two years.

However, Pakistan’s rapid solar expansion has not been without its challenges. As more consumers generate their own power and become more self-reliant for their energy needs, utilities have less revenue while still having to recover the fixed costs of maintaining the grid. 

The latest energy crisis has also prompted regional peers, including the Philippines, to replicate Pakistan’s rooftop solar expansion model, while Pakistan’s experience highlights both the benefits of rapid rooftop solar growth and the challenges it can create for the wider power system

High electricity prices and falling installation costs have shortened rooftop solar payback periods, making the Philippines the largest solar importer in Asia. The country’s rooftop solar capacity nearly doubled to about 1,300 MW in early 2026.

“Removing regulatory and financial barriers, similar to Pakistan, could boost the scale of rooftop solar adoption in Thailand, support the growth of a domestic solar installation and service industry, reduce electricity costs, and provide consumers with greater energy independence,” said Isaad.

The report recommends transitioning from net billing to net metering, which would allow consumers to offset electricity consumption at retail rates and reduce payback periods to as short as 4.5 years.

IEEFA also suggests increasing solar buyback rates to achieve quicker cost recovery for consumers, streamlining tax incentives to reduce eligibility constraints for households and businesses, removing restrictive quotas and accelerating the deployment of solar with battery energy storage systems.

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