To buy the system or to buy the service: the emergence of a solar service model in Thailand

Potisat, T., Tongsopit, S., Aksornkij, A. and Moungcharoen, S. 2017. “To buy the system or to buy the service: the emergence of a solar service model in Thailand”, Renewable Energy Focus 21:1-10.

Abstract

Thailand has experienced a rapid increase in utility-scale solar PV investment (>1 MWp), while the growth of investment in smaller-sized rooftop PV systems is far behind. Due to the continuous decline in PV module costs and the discontinued support in the form of feed-in tariffs, the market is gradually transitioning to installations for the purpose of self-consumption. The main barrier for market expansion is the high upfront costs of solar PV systems. Rather than buying the system, new business models are offering customers to buy the service from solar PV systems instead. The Solar PPA model is an emerging solar service business model in Thailand. This model eliminates the investment cost and operating risks for the customer. This paper takes on the view of a commercial-sized customer to compare the options between the Buying Model and the Solar PPA model. From the customer’s viewpoint, the cost of electricity generation, or the levelized cost of electricity (LCOE), under the Solar PPA model is more attractive. The results show an LCOE of 4.82 THB/kWh (0.14 USD/kWh) for the Solar PPA model, 9.56% less than buying the system at 5.28 THB/kWh (0.16 USD/kWh). The Solar PPA model also proves to be a more attractive option in most sensitivity cases. This paper discusses conditions under which the model is feasible and recommends that the design of future support schemes for solar PV self-consumption should enable the expansion of innovative business models, including the Solar PPA model and other third-party ownership models.

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in: Energy Policy and Economics, Energy Policy-Publications, Research
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