Thailand should follow Malaysia's example and
introduce incentives for solar project developers to use local materials, say
Thai operators.
The
Thai solar industry currently relies heavily on imported components, mainly
from China, with no import tariffs, said Wuthipong Suponthana, the managing
director of Leonics and a representative of the Solar Club in Thailand.
Most
solar farm installations use imported modules and other supportive components.
The value of these imported modules and parts is high, estimated at 70-80% of
total investment cost.
"Of
the total cost of 70 million baht for each megawatt of solar energy, up to 50
million baht goes to import components with minimal job creation locally,"
said Dr Wuthipong.
Malaysia,
the only Southeast Asian nation whose solar usage is on par with Thailand's,
offers enticements for foreign solar investors to use local materials.
Solar
operators generally get one Malaysian cent (10 satang) per gigawatt-hour of
electricity produced, while firms using local materials get two cents per GwH.
Germany,
the world's largest photovoltaic market, has created 300,000 local jobs from 20
years of experience in the industry, said Dr Wuthipong.
Leonics
is at the stage of setting up an assembly plant in Malaysia to pursue projects
there.
The
Solar Club, with six local solar companies as members, has held talks with
energy regulators and the Board of Investment (BoI) about possible incentives
for solar in Thailand, but no concrete action has been taken to date.
"The
import duty on solar panels was waived several years ago to promote renewable
energy development in Thailand," Dr Wuthipong told a solar workshop hosted
by the German Society for International Cooperation (GIZ).
"What
we suggested the BoI do is offer a longer tax-holiday period for companies
using local contents. So far they see no need to do that."
Under a
10-year development plan through 2021, Thailand aims to have 2,000 megawatts of
solar energy installed.
Thus
far, more than 3,000 MW worth of solar projects including solar thermal
schemes, have been approved or are in the submission stage.
The
Northeast is a prime area for capitalising on the solar market given the
highest rate of solar radiation, said Wandee Khunchornyakong, the chief
executive of SPCG Plc, which runs solar plants there.
Also,
there is ample supply of land at a reasonable price and the high terrain
buffers the region from environmental hazards like flooding.
Raymond
Schonfeld, the managing director of Single Market Ventures, said Thailand would
be best off by developing a local market and focusing on Asean opportunities.
"In
two years, Thailand has quadrupled its growth target," said Mr Schonfeld.
"And this would serve the Thai industry well by developing optimal
technological solutions that can be exploited throughout Asean."
Nareerat
Wiriyapong & Dennis O'Reilly
Business & Investment Opportunities
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