Thai investor capitalizes on solar business incentives in Japan

BANGKOK, NNA - A Thai solar energy developer is taking full advantage of incentives in Japan to expand its business in the country, saying its Japanese operations promise to be much more profitable than those at home.

Ukrit Tanthasatian, managing director of Primo Energy Co. which owns a 1.27-megawatt solar farm in Fukui Prefecture on the Sea of Japan coast, told NNA in an interview that the Japanese government offers good incentives to domestic and foreign solar investors.

"Japan normally offers a higher feed-in tariff than Thailand," he said, adding Japan has started raising the feed-in tariff to promote and encourage renewable energy production since the Great East Japan Earthquake and tsunami and subsequent nuclear disaster in 2011.

His company has signed a 20-year contract with Japanese authorities to supply electricity at a rate of 32 yen (about 28 U.S. cents) per unit under the FIT incentive formula, compared with around 5-6 baht (14-17 U.S. cents) in Thailand. Moreover, he said, Japanese banks offer loan at interests of about 3 percent against 6 percent at Thai banks.

Ukrit said Primo Energy plans to spend an additional 3 billion baht ($84 million) in the next three years to build more solar farms with output capacity of 1,000 to 5,000 kilowatts each in Japan for a combined output capacity of 30 megawatts. Eighty percent of the new investment will be covered by project finance arrangements with Japanese banks.

A one-megawatt solar farm costs about 90 million baht, generating revenue of 1 million baht a month on average. "Profit from solar farm operations is not overwhelming but steady and secure," he added.

Primo Energy was established in 2014 with a purpose of developing small solar farms with output capacity of between 1 to 5 megawatts each.

The Thai government has also promoted renewable energy since around 2010, offering the FIT system and other incentives. (NNA/Kyodo)