Raymond Schonfeld: Thailand's Developing Solar Industry A Teaching Point for the World

Energy independence, that is a country's ability to meet its energy demand by producing its own energy, is seen by many as a vital global development.  Beyond politics, since oil and gas reserves are not located in every country of the world, clean energy technologies become an extremely valuable commodity.  Yet, as Thailand highlights, development of these resources in embryonic markets will endure growing pains.

Thailand's efforts to develop its solar industry offer a great case-study in the challenges nations, particularly developing countries, face when making a shift toward clean energy.

In a recent article for Renewable Energy World, Raymond Schonfeld gives a great overview of the strengths and weaknesses of Thailand's solar industry.  As Schonfeld points out, Thailand has a great foundation for the development of new industry -- it ranks 25th in the world by Gross Domestic Product (GDP), 23rd in electricity generating capacity, and 20th in population.  Additionally, the country offers investment friendly policies, a well-developed infrastructure, and a free-enterprise economy.

Last year Thailand adopted an aggressive national renewable energy plan, which included a goal to increases its photovoltaic solar capacity 15 fold within the next 15 years.  This would see PV capacity grow from 35 megawatts to 550 megawatts.

So, all the criteria for successful development are lined up, right?  Not quite.  Schonfeld highlights that although Thailand ranks 25th in national GDP, it is still not a developed economy -- the country's GDP per capita is rated 120th in the world.  Furthermore, Thailand is just three years removed from its latest military coup.  So there are some chinks in the Southeast Asian nation's economy.

Besides economic fragility there are also other concerns.  For example, rates for the country's Feed-in Tariff program were announced, suspended, and then reintroduced at a lower rate.  Neither rate met international norms.  Another area of concern is that Thailand has not established a strategy to develop cost-competitive solar panel manufacturing, a necessity for a growing industry.  And, finally only one bank has introduced a finance program for solar projects, access to financing is critical for the industry to emerge.

The evolution of Thailand's solar industry is an excellent guide for emerging cleantech markets.  As Schonfeld states, "What is important is not whether the good news outwighs the bad, as there is clearly evidence of both, but whether a consensus is possible on what still needs to be done."