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New Tax Scheme for Rooftop Solar Panels by Mid-Year

A new tax reduction scheme aimed at encouraging households to install rooftop solar panels is set to be finalised by mid-year, according to the Department of Alternative Energy Development and Efficiency (DEDE). The initiative is designed to alleviate electricity bills and reduce carbon dioxide emissions.

Under the proposed scheme, households that purchase solar panels with a power generation capacity of less than 10 kilowatts and costing under 200,000 baht will be eligible for the tax reduction. The calculation for this reduction will be managed by the Revenue Department, as stated by DEDE director-general Wattanapong Kurovat.

DEDE anticipates that approximately 90,000 households will participate in the program within the next two years. The scheme, requiring a budget of 20.2 billion baht, aims to cut electricity consumption by 585 million kilowatt-hours annually.

Currently, gas accounts for 60% of the fuels used for electricity generation in the country. However, due to insufficient domestic gas supplies, Thailand relies on imported LNG, whose prices are volatile. The surge in global LNG prices in 2022, following Russia’s invasion of Ukraine, was a significant factor in the rising electricity costs in Thailand.

In the first half of 2022, the power tariff, which determines electricity bills, would have escalated to 6 baht per kilowatt-hour if not for the Electricity Generating Authority of Thailand (Egat) subsidising the prices to mitigate the financial strain on households and businesses. This subsidy led Egat to incur substantial losses, nearly reaching 100 billion baht.

Despite the stabilization of LNG prices, electricity costs remain high as current power bills are being used to offset Egat’s previous losses, a situation expected to persist until 2025, according to the Energy Regulatory Commission.

The shift to solar power can potentially lower monthly electricity expenses for households. New Energy Plus Solutions Co, a distributor of solar panels manufactured by Shanghai-based Jinko Solar Holding, has praised the tax reduction scheme for its positive financial and environmental implications. Treerat Sirichantaropas, chief executive of New Energy Plus, noted that a similar tax reduction initiative in the US allows for a tax deduction equivalent to the cost of the rooftop solar panels purchased.

In another development, the DEDE is also planning to introduce a separate tax break, although details of this plan have not yet been disclosed.

Officials, including department representatives and industry stakeholders, have expressed support for these initiatives, which are expected to contribute significantly to the country’s energy efficiency goals and environmental sustainability efforts.

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