Analysis of feed-in tariff models for photovoltaic systems in Thailand: An evidence-based approach

Abstract

Since 2006, Thailand has adopted several feed-in tariff (FIT) models. Thailand's FIT has decreased continuously from 11.50 baht/kW h in 2006 to 4.16 baht/kW h in 2016 as a result of the rapid global decline in the price of photovoltaic (PV) systems. Three FIT policies were incorporated in models (i.e., premium, fixed-price, and front-end loaded FIT), to stimulate the installation of PV systems. This study evaluated the economics of utility-scale 1 MW solar PV systems in Thailand, with support from the FIT policy. The net present value was calculated as 28.75–38.72 × 106 baht, with an internal rate of return of 11.83%–15.32%, a payback period of 7.49–10.06 years, and a benefit–cost ratio of 1.53–2.15. These data indicate that Thailand's FIT policy already successfully operates as a solar PV support mechanism. The FIT models from countries where PV systems have been successfully installed (China, Japan, and Germany) were also studied, to help policy-makers devise a suitable FIT scheme for Thailand. Thailand's FIT model should implement the FIT policy in three main phases for new investors. In the first phase, the installed PV capacity is not high, and high fixed FIT rates will be set to attract investors. In the second phase, the FIT will be adjusted and the degression rate will reduce the profitability of the project. In the final phase, the installed PV capacity will reach the target and the FIT will be changed via an auction to allow investors to compete for the tender.