Distributed solar, the use of small-scale solar distributed over a local area, can be a powerful tool to reduce greenhouse gas emissions from the electricity sector. As distributed solar prices decline and deployment accelerates, countries must grapple with the impact of customers generating their own power on the utilities and their bottom-line.
In Thailand, growing consumer interest in distributed solar, and an upcoming launch of a distributed solar policy by the Thai government, provide the backdrop for a recently completed analysis of distributed solar impacts on utility revenues and customer electricity rates. The analysis, Understanding the Impact of Distributed Photovoltaic Adoption on Utility Revenues and Retail Electricity Tariffs in Thailand, was completed by the National Renewable Energy Laboratory, Lawrence Berkeley National Laboratory, USAID Clean Power Asia and Chulalongkorn University’s Energy Research Institute with support from USAID’s Distributed Photovoltaic (DPV) Toolkit Program. It explores a common question that energy stakeholders have across the globe: will deploying more distributed solar reduce utility revenues and lead to higher customer electricity rates to cover grid maintenance and electricity distribution costs?
In the case of Thailand, the authors found that with proper planning, distribution utilities should see minimal impact on their financial health from increased DPV deployment in the medium and long-term. This is because the Thai utility regulatory paradigm is well suited to support distributed solar. When it comes to electricity rate impacts, the way in which distributed solar customers are compensated for their excess electricity matters significantly. In Thailand, customers likely will see a modest average retail electricity rate increase of 0.1-0.3% under a base scenario.
The report provides insight into how the findings impact each of Thailand’s energy institutions, many of whom provided researchers with data sets, input and other feedback instrumental to the completion of the analysis.
Overall, distributed solar can provide substantial benefits to Thai society, and policymakers can advance distributed solar policy knowing that utility revenue and rate impacts from distributed solar are minimal. Such knowledge encourages distributed solar deployment, a key element of a clean energy portfolio and method to reduce greenhouse gas emissions in Thailand and elsewhere.
Alexandra Aznar is a project leader at the National Renewable Energy Laboratory (NREL) in Golden, Colorado. She works on clean energy policies and provides solar technical assistance to local, state, and national-level policymakers. She leads the implementation of the USAID Distributed PV Toolkit. She holds a Masters of Public Affairs (M.P.A) with a concentration on energy and climate change policy from Indiana University and a B.A. in Government from Claremont McKenna College.