In a major push towards a greener future, the Thai Cabinet has approved significant personal income tax deductions for individuals installing rooftop solar panels. This policy is designed to accelerate the adoption of renewable energy and bolster Thailand’s transition to a sustainable, eco-friendly economy.
Thai Solar Tax Deduction: Eligibility and Details
The government has greenlit a personal income tax deduction of up to 200,000 Baht for the costs associated with the equipment and installation of solar rooftop systems on residential buildings. This is a substantial increase from previously discussed incentives, making solar power more accessible than ever for homeowners. This financial support complements other recent legislative changes, such as the new law that simplifies rooftop solar panels in Thailand, which has already streamlined the installation process.
To qualify for this generous deduction, homeowners must meet the following criteria:
- The deduction is limited to the actual amount paid for the system, capped at 200,000 Baht.
- The system can be installed on rooftops, decks, or any part of a home that is connected to the Metropolitan Electricity Authority (MEA) or Provincial Electricity Authority (PEA) grid.
- The deduction covers one system only and can be claimed in the tax year when the grid connection is completed.
- All purchases must be made from VAT-registered businesses and supported by full e-Tax Invoices.
This new policy represents a significant enhancement of the Thailand solar tax incentives unveiled in 2024, demonstrating a stronger commitment to residential solar adoption. While the deduction covers key components like panels and inverters, whose basics of manufacturing involve complex processes, it’s important to note that expenses for batteries and battery management systems are not included.
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New Incentives for Businesses: Thai Solar Tax Deduction
Beyond individual homeowners, the Cabinet has also approved a measure to encourage commercial investment in energy conservation. Businesses can now qualify for a 50% corporate and personal income tax deduction on costs for high-efficiency machinery and equipment, including solar-related investments. This incentive is available provided the equipment is new, unused, located in Thailand, purchased by December 31, 2028, and is not receiving benefits under other tax schemes.
Impact on the Renewable Energy Sector: Thai Solar Tax Deduction
The Thai government’s goal with this tax deduction policy is to spur the adoption of renewable energy technologies across the country. The Ministry of Energy projects that this initiative alone could increase the capacity of rooftop solar power systems in Thailand by approximately 300 megawatts (MW).
By promoting clean energy generation at the residential level, the policy aims to reduce reliance on traditional energy sources, which in turn contributes to national energy security and environmental protection. This is a key part of the broader legislative landscape, which includes measures like Thailand’s solar panel bill, aimed at shaping the nation’s energy future.
Thailand’s Commitment to Renewable Energy: Thai Solar Tax Deduction
This tax deduction policy is a cornerstone of Thailand’s larger strategy to reduce its carbon footprint and increase the share of renewables in its energy mix. The government has been actively promoting clean energy through various mechanisms, including feed-in tariffs and subsidies for larger projects.
The focus on rooftop solar empowers individuals to participate directly in the energy transition. This aligns with the country’s ambitious long-term vision for renewable energy, as seen in plans for Thailand’s rooftop solar capacity auctions that aim for massive expansion in the coming decades.
Future Prospects for Rooftop Solar in Thailand: Thai Solar Tax Deduction
The new tax deduction is expected to significantly boost the adoption of rooftop solar systems across Thailand, fueling growth in the renewable energy sector. This initiative provides a direct financial benefit to individuals by lowering their electricity bills while contributing to the nation’s energy security and environmental sustainability goals.
As Thailand continues to champion renewable energy, the country is poised to see a dramatic increase in rooftop solar installations, reducing its dependence on fossil fuels and cutting greenhouse gas emissions. The government’s commitment is clear, paving the way for a more sustainable future.
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