Cross-shareholding and duplicate registration of bank guarantees cause issues for 'retail' and 'community solar' investors, favoring large capital?

Amid the energy crisis and volatile oil prices, the “Community Solar” program has emerged as a key policy that the government expects will help households generate their own electricity, reduce long-term costs, and create opportunities to sell surplus power back to the state. A total budget of 50 billion baht, or 50,000 baht per household, has been allocated to promote the installation of solar power generation systems.

The project was officially launched on October 27, 2026. Interested citizens can register through the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA) from October 27, 2026, to January 31, 2027. Rights will be allocated in order of application, subject to verification and reservation, until the quota of one million households or the 50 billion baht budget is exhausted.

However, the implementation of the project still raises issues that require close monitoring, particularly the criteria for selecting contractors for inclusion in the Vendor List. There are concerns that these criteria may affect the competitive opportunities of small-scale operators, as well as questions regarding installation costs and price differentials.

Will the 50 billion baht in support funds truly be distributed equitably to citizens and operators, or will the benefits ultimately accrue to only a select group of businesses?

Details on the One Million Rooftop Solar Project Proposal

Under the Solar Power for the People project, the government will provide a subsidy of 50,000 baht per household to cover the cost of equipment and solar panel installation. The system size is limited to 5–10 kilowatts per electricity meter. Households may install a new system or add to an existing one. To qualify for the subsidy, installation must be carried out through an electricity utility or a contractor registered with the Provincial Electricity Authority (PEA) or the Metropolitan Electricity Authority (MEA).

The core principle is that households should first use the electricity they generate, particularly during daylight hours. If production exceeds consumption, the surplus can be sold back to the utility at a rate of 2.20 baht per unit, up to a maximum of 5 kilowatts, for a period of 20 years, subject to the specified terms. A 5-kilowatt solar panel system can generate approximately 500–700 units of electricity per month and has an operational lifespan of roughly 20–25 years.

In addition, the government has partnered with three state-owned banks—the Government Savings Bank, the Government Housing Bank (GHB), and the Bank for Agriculture and Agricultural Cooperatives (BAAC)—to offer loans to households that cannot afford the upfront cost. Borrowers can receive up to 90,000 baht at a fixed interest rate of approximately 2.5% per year over a seven-year term, with monthly installments of around 1,200 baht. No collateral is required, and loan eligibility is assessed based on the applicant’s electricity payment history over the past 12 months, in accordance with each bank’s specific criteria.

Regarding eligibility and application conditions, applicants must be Thai nationals using residential electricity under Meter Type 1, excluding temporary meters and condominiums. The name of the applicant must match the name on the meter account, and each individual is eligible to receive the subsidy only once throughout the project’s duration, including registrations with both the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA).

After securing the right to participate, applicants must install the system and submit documents in accordance with the specified criteria, including tax invoices issued on or after October 27, 2026. Applications for grid interconnection must be submitted to the relevant electricity utility by August 31, 2027, and successful interconnection approval must be obtained by September 30, 2027, to qualify for the financial support.

The government estimates that this project will reduce the public’s electricity costs by up to 24 billion baht annually, while supporting the transition to clean energy and reducing reliance on fossil fuels.

The Vendor List Issue and Suspicions of Favoring Major Capital

However, a critical issue has been raised regarding the registration criteria for the vendor list of the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA). These are key conditions that installers must meet before they can undertake work on the project.

The government stated that over 1,000 businesses have registered, and that the public can freely choose their installer. It affirmed that there is no specification locking or preferential treatment given to any specific company.

Supachot Chaisat, a party-list Member of Parliament for the People’s Party, noted that despite the large number of registered businesses, the additional financial requirements may prevent many small and medium-sized enterprises (SMEs) from participating.

Supachot stated that, upon reviewing the PEA’s vendor list, which contains approximately 600 entries, he found that more than 60 companies share the same registered address. Additionally, over 120 companies have overlapping directors or shareholders, including cross-shareholding arrangements. This suggests that many of these companies may operate under the same network.

Another condition that has drawn criticism is the requirement for contractors to provide a bank guarantee (BG) to secure the quality of installation and after-sales service. Although the government has explained that this measure is intended to prevent contractors from abandoning projects and that the funds will be refunded within seven days after all conditions are met, small-scale operators view this requirement as a significant burden on their working capital, especially when compared to the standard installation cost of approximately 140,000 baht per household.

Suchaphot believes that this condition may become an additional barrier for operators, even after they have passed the qualification checks by the electricity authority. As a result, an estimated 60–70 percent of small and medium-sized operators may be forced to withdraw or may be unable to bear the financial burden.

Meanwhile, Treechat Sirichantharot, a member of the energy economics team of the Democrat Party, noted that while the core concept of the community solar program is positive—enabling citizens to generate their own electricity, reducing reliance on imported energy, and mitigating the impact of geopolitical volatility—the problem lies in the design of the conditions, which may create an uneven playing field among operators.

Tri Rat explained that individuals seeking the 50,000-baht subsidy have two installation options: directly through the Provincial Electricity Authority (PEA) or the Metropolitan Electricity Authority (MEA), or through operators on the approved vendor list. However, after the electricity authorities issued additional guidelines, new financial conditions emerged that could pose obstacles for small-scale operators.

In particular, installers are required to front the installation costs and wait to receive the subsidy reimbursement only after the installation and grid connection are fully completed. This process may tie up capital for approximately three months, after which operators must then bear the additional burden of providing a separate layer of collateral.

Tri Rat noted that the requirement to post a Bank Guarantee (BG) may be a heavy burden for small operators, especially given that installation profits are only around 10,000 to 20,000 baht per household. In contrast, large companies hold an advantage by already having credit lines with banks, allowing them to obtain bank guarantees without needing to pledge additional assets, unlike small operators.

The Role of Power Utilities and Installation Capacity Limitations

In addition, Tri Rat questioned the role of the electricity utility in directly undertaking the installation of solar cell systems, despite its primary responsibilities of setting standards and permitting grid connections. He argued that this could create a conflict of interest, as the same entity is involved in setting regulations, approving grid connections, and competing with private businesses for installation contracts.

Tri Rat stated that the utility set the installation price at approximately 140,000 baht per household. However, reports indicated that the utility subcontracted the work for around 110,000 baht before charging residents 140,000 baht. This raised questions about the approximately 30,000 baht difference, specifically what costs it covered and whether the equipment and services provided were commensurate with the amount paid by the public.

Consequently, Tri Rat proposed that the utility should focus on supporting installations and expediting the grid connection process, rather than acting as the installer itself. He also recommended abolishing long-term bank guarantees and allowing residents to freely choose their installers to foster fair competition in both price and quality.

Furthermore, doubts have been raised regarding the feasibility of completing installations for one million households within the prescribed timeframe. Estimates indicate that if the installation and grid connection must be completed by September 2027, only approximately eight months will remain, requiring an average of 125,000 households to be served per month. However, there are only about 500 to 600 operators in the system, which may be insufficient to meet the target.

There are also constraints related to equipment, particularly inverters, which are critical components for converting electricity generated by solar panels. According to Trirat, Thailand installed approximately 120,000 residential inverters last year. Even if the annual installation capacity increases to around 200,000 units, this remains far short of the one-million-household goal.

Consequently, questions have emerged as to whether manufacturers and distributors can supply sufficient equipment to meet the rapidly growing demand, and whether the installation and grid-connection approval processes can genuinely handle the large volume of work within the specified deadline.

The government affirms transparency and is ready to adjust terms to support SMEs

The government has affirmed that the project does not favor large capital groups, but rather aims to directly benefit the public through reduced electricity costs and the sale of surplus power back to the utility.

Anutin Charnvirakul, the Prime Minister, confirmed that the initiative is designed to reduce household expenses and promote the use of renewable energy, rather than to support any specific business operator.

Meanwhile, Ploypair Suwannachai, Deputy Minister of Interior, clarified that participating operators must meet the standards set by the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA) regarding qualifications, equipment, and post-installation warranties. Citizens have the right to independently select from registered companies. The Bank Guarantee (BG) serves solely as a measure to build public confidence and will be returned to the operator within seven days after all conditions are fully met.

However, to address the capital access challenges faced by small operators, the Ministry of Finance is in discussions with the Credit Guarantee Fund for Micro, Small and Medium Enterprises (CGF) to replace the mandatory 50,000-baht cash deposit with a guarantee fee. This fee is expected to cost no more than 500 baht per year, aiming to reduce working capital burdens and enable more SMEs to participate in the program.

Propose a review of the project

Supachot stated that he does not oppose the concept of community solar, but believes that the current operational model has issues on multiple fronts. He therefore proposed that the government review or cancel the existing project and redesign the system to be more transparent and to foster fairer competition.

One of the proposals is that there is no need to use the 50 billion baht loan to directly subsidize the project. Instead, relevant laws and regulations should be amended to allow residents to sell electricity back to the grid and directly offset the proceeds from electricity sales against their loan repayments via their electricity bills. Additionally, the issuance of special loans or bonds to support solar cell installations should be considered.

Furthermore, he proposed adjusting the performance bond for contractors to an appropriate ratio, such as 5–10% of the project value, complemented by other measures. These include blacklisting contractors who abandon projects and implementing a public review system for project performance. This would encourage contractors to compete on quality and price. The government also retains the authority to review or terminate the project if the terms are found to be inappropriate.

“If the government cannot answer the public’s question of whether every baht and every satang truly reaches the people, it should not continue with this project, as there are other mechanisms that can be implemented without the need for a loan,” Supachot said.

Ultimately, the community solar program is a policy with the potential to reduce electricity costs and distribute energy opportunities to households. However, the use of a 50 billion baht budget, which is sourced from state loans, must be accompanied by transparency, accountability, and fair competition.