While EU countries continue to scale back their feed-in tariffs (FiT), Thailand just added another gigawatt, doubling its solar target to 3 gigawatts (GW) by 2021.
And the government is specifying where that GW comes from and by when: 200 MW must be installed by the end of this year; half from systems smaller than 10 kilowatts (kW) and half between from 10 kW and 1 MW. The remaining 800 MW is reserved for community-owned projects that are online by the end of next year.
Prices are as high as $225 per megawatt-hour (MWh) for the smallest installations, about 57% higher than the global average, according to Bloomberg. Village-owned projects get $315 MWh when the 25-year contract begins and $145 MHh when it ends.
Since Thailand launched an aggressive FiT in 2006, nearly 1 GW of solar PV has been installed as of 2010 and contracts for over 4 GW of renewables, half of that for solar PV, says Paul Gipe of Wind-Works.
Until recently, contracts were for 10 years or less and prices varied based on the renewable technology. Now they are 25 years for solar PV with higher prices, bringing the FiT into alignment with programs in Germany, the UK and Ontario, Canada. In an unusual twist, the program pays more in the early years of a contract and diminishes toward the end.
Thailand currently relies on fossil fuels for about 80% of its energy; its goal is to build almost 14 GW of renewable energy capacity by 2021.
Spain Kills Tariff Program
Meanwhile, after months of speculation and years of cutting its FiT, Spain has ended the program because of its financial situation.
The country, which was the world’s biggest solar market in 2008, faces a cumulative deficit of $34.5 billion to utilities and desperately needs the money that would go to the FiT, estimated at close to $6 billion this year.
"The measures in this reform aren’t easy for anyone, but they’re absolutely necessary," Industry Minister Jose Manuel Soria says. "If we did nothing, the only two alternatives would either be bankruptcy of the system or an increase of the price to consumers of more than 40%."
To assuage the solar energy sector – which built a slew of projects expecting to paid under the FiT for 25 years – the government has created a new framework where renewable energy generators get a "supplement to their investment costs according to the technology" that allows "reasonably profitability," reports CSP World. It is fixed at 7.5% for the next six years.
That translates into about a 5% return after taxes, better than nothing but very low, says Protermosolar, which represents Spain’s concentrating solar industry. "Entrepreneurs would never have invested so much money in an area with so much risk for such a small return," he told Bloomberg BusinessWeek.
"This changes the conditions for investments made by the sector over more than 20 years,"
Spain’s wind industry lobby froup, the said it expects a "cascade of financial problems" as a result of the reforms, which it said are "clearly retroactive."
"This changes the conditions for investments made by the sector over more than 20 years," Asociacion Empresarial Eolica, which represents the wind industry, told BusinessWeek. "With this reform, the government is increasing even more the uncertainty affecting the industry."
Spain has 2 GW of renewable energy spread across 45 plants, with six more under construction (300 MW) and a 50 MW plant ready to start construction.
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