Thailand Launches Community Solar Power Initiative

Overview

On October 27, 2025, Thailand’s National Energy Policy Council (NEPC) approved the preliminary framework for the implementation of the “Community-based Solar Power Generation Project”, which is part of Thailand’s Ministry of Energy’s “Quick Big Win” policy initiative. This project aims to enhance local energy security and reduce electricity costs for local communities nationwide. The Thai government, through the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA), intends to offtake electricity from power producers and sell it to local communities at a predetermined price—tentatively, the selling price is equivalent to the purchasing rate of THB 2.25 per kWh (plus grid service costs).  This selling price is lower than the current PEA/MEA’s prevailing standard progressive rate of THB 2.3488 – THB 4.4217 per kWh.

The other initiative under the Quick Big Win policy is the push for the Direct PPA and Third Party Access pilot program to allow for the Thailand Board of Investment (BOI)-approved data centers to procure electricity directly from renewable energy power producers through the government utility grids. Please see our recent client alert on Thailand’s Draft Regulation on Direct Power Purchase Agreements via Third Party Access for Data Centers.

In this article, Hunton provides an overview of the types of projects eligible for the Community-based Solar Power Generation Project, including electricity purchase terms, process, timeline, and tentative selection criteria. This overview is based on publicly available information and discussions with relevant regulatory authorities and policy-making bodies, including the Energy Policy and Planning Office (EPPO), the Department of Alternative Energy Development and Efficiency (DEDE), and the Energy Regulatory Commission (ERC).

Project Overview

• Type: Ground-mounted solar farms
• Capacity per site: Capacity cannot exceed 10 MW per site (VSPP: Very Small Power Producer)
• Total national target capacity: 1,500 MW
• Quota: One project per local community; one VSPP per grid connection point

Electricity Purchase Terms

• Offtaker: Provincial Electricity Authority or Metropolitan Electricity Authority
• FiT rate: THB 2.25 per kWh
• Contract Type: Non-Firm Power Purchase Agreement (PPA)
• Contract Term: 25 years
• Tentative Scheduled Commercial Operation Date (SCOD): Within 18 months as from the execution date of the respective PPA.
• Ownership of RECs and Carbon Credits: The rights to Renewable Energy Certificates (RECs) and Carbon Credits generated from electricity generation will belong to the PEA or the MEA. This condition will be expressly provided for in the PPA with the PEA or the MEA. This is similar to the recent Big Lot Program.

Steps for Implementing the Community-Based Solar Power Generation Project

The key next steps for implementing the Community-based Solar Power Generation Project are as follows:

Current Status and Targeted Timeline

Currently, the relevant governmental authorities are working on steps nos. 1 and 2 under the graphic above (i.e., local community identification and assessment and development of criteria and regulations).  

The ERC anticipates finalizing and releasing the draft regulation for electricity procurement for the Community-based Solar Power Generation Project within November 2025, in order to meet the Quick Big Win policy timeframe of four months (October 2025–January 2026). The application and selection process is expected to take place within December 2025.

Tentative VSPP Selection Criteria

The selection of VSPPs will be based on readiness in terms of qualifications, technical capabilities, and cooperation with the local community and will be assessed on a first-come, first-served basis. The ERC will determine the detailed selection criteria and conditions under the following framework:

1. Qualifications: The applicant must meet the specified qualifications, such as being a juristic person registered in Thailand, not being a government agency or state enterprise, meeting the minimum registered capital requirement, and providing a bid bond.
   
   It is unclear from the limited information available at this time whether the regulations would limit foreign ownership like the Big Lot Program, i.e., if the power producer is a limited company with foreigners being shareholders: (i) the shareholding ratio of such foreigners must not exceed 49 percent of the total issued shares; and (ii) the number of such foreign shareholders must not exceed half of the total number of the shareholders.
2. Technical Aspects: The applicant must demonstrate technical readiness, such as site readiness, technological readiness, fuel readiness, financial readiness, and suitability of an implementation plan.
3. Cooperation with the Community: The applicant must obtain consent from the LAO to serve as the developer of the project in the local community area, using the form specified by the ERC.

Exemption of Factory License Requirements

To expedite the Community-based Solar Power Generation Project, the NEPC has assigned the Ministry of Industry to consider exempting the factory license requirement for ground-mounted solar farms under this project.

If this exemption is approved by the Ministry of Industry, it should reduce both the time and cost for power producers in obtaining the necessary permits and licenses for ground-mounted solar farms.

How is the Community-based Solar Power Generation Project Beneficial to Businesses?

The Community-based Solar Power Generation Project in Thailand presents various strategic benefits for energy businesses in Thailand, including:

• New Market Opportunities: With a sizable quota of 1,500 MW for ground-mounted solar farms (up to 10 MW per site), energy businesses have a chance to tap into a large-scale deployment across multiple communities around the country.

• Long-Term Revenue Stability: The 25-year PPAs with governmental utilities offer predictable cash flows for businesses. Although modest, the fixed rate of THB 2.25 kWh provides clarity for financial modeling and ROI calculations.

• Potential for Scaling and Innovation: Although RECs and carbon credits are retained by the PEA/MEA, participation in such programs can position businesses for future carbon market involvement or green financing in Thailand or further afield. The initiative may serve as a model for future decentralized and liberalized energy programs in Thailand, allowing companies to build expertise and scale operations further in the future.

Next Steps

As the detailed criteria and regulations for the Community-based Solar Power Generation Project are still under development, and the arrangement between VSPPs and local communities remains unclear, the Energy and Infrastructure team at Hunton will continue to closely monitor progress and provide updates as new information becomes available.

This article was drafted by Chumbhot Plangtrakul, Thaphanut Vimolkej, and Jidapa Songthammanuphap.