Mahanakorn Partners Group Co. Ltd.

Thailand Strengthens Support for Renewable Energy and Sustainability Initiatives

Thailand has taken another significant step toward achieving its sustainability and energy-transition objectives through the introduction of new tax incentives under Royal Decree No. 805 B.E. 2569 (2026). The measures are designed to encourage both individuals and businesses to invest in renewable energy solutions and energy-efficient technologies, while simultaneously reducing energy costs and supporting the country’s long-term environmental goals.

The new incentives reflect the Thai government’s broader commitment to promoting clean energy adoption, improving energy efficiency, and accelerating the transition toward a more sustainable and low-carbon economy.

Tax Incentives for Residential Rooftop Solar Systems

One of the most notable aspects of the new decree is the introduction of a personal income tax deduction for individuals who install rooftop solar power systems at their residences.

Under the new rules, eligible taxpayers may claim a personal income tax deduction of up to THB 200,000, based on the actual costs incurred for the purchase and installation of qualifying solar power systems.

To qualify for the deduction, several conditions must be satisfied, including:

✓   The solar power system must be installed at a residential property owned by the taxpayer.

✓   The system must be connected to the electricity network operated by either the Metropolitan Electricity Authority (MEA) or the Provincial Electricity Authority (PEA).

✓   The taxpayer must obtain and retain valid VAT invoices and electronic tax invoices (e-Tax Invoices) evidencing the expenditure.

✓   The installation must comply with the relevant regulatory and technical requirements prescribed by the authorities.

✓   The incentive is available for qualifying expenditures incurred until 31 December 2028.

This measure is expected to make rooftop solar installations more financially attractive for homeowners while encouraging greater adoption of distributed renewable energy generation throughout Thailand.

Enhanced Tax Deductions for Businesses

In addition to the incentives available to individuals, the Royal Decree introduces enhanced tax benefits for businesses investing in energy-efficient machinery and equipment.

Companies that acquire qualifying machinery or equipment certified as energy-efficient may be eligible to claim tax deductions of up to 150% of the actual investment cost.

The enhanced deduction is intended to encourage businesses to modernize operations, improve energy efficiency, reduce operating costs, and lower their environmental footprint.

Potential beneficiaries may include:

✓   Manufacturing companies;

✓   Industrial operators;

✓   Logistics and warehousing businesses;

✓   Hotels and hospitality operators;

✓   Commercial buildings and property developers; and

✓   Other enterprises seeking to reduce energy consumption and improve sustainability performance.

By providing a super-deduction above the actual investment cost, the government seeks to accelerate private-sector investment in technologies that contribute to energy conservation and environmental sustainability.

Regulatory Simplification and Solar Adoption

The Thai government has also indicated its intention to continue streamlining regulatory procedures and licensing requirements associated with rooftop solar installations.

Historically, regulatory approvals and technical requirements have often been viewed as barriers to widespread solar adoption. Simplifying these processes is expected to facilitate greater participation by households and businesses while supporting Thailand’s renewable energy targets.

These efforts form part of Thailand’s broader strategy to increase renewable energy capacity, strengthen energy security, and promote sustainable economic development.

MPG’s Perspective

The introduction of these tax incentives represents a positive development for both taxpayers and the broader Thai economy.

For individuals, the new personal income tax deduction significantly improves the economics of residential rooftop solar installations and may shorten the payback period associated with solar investments.

For businesses, the enhanced deduction for energy-efficient machinery and equipment creates an attractive opportunity to reduce taxable income while simultaneously lowering long-term operating costs through improved energy efficiency.

Given rising energy prices, increasing environmental expectations from investors and customers, and the growing importance of ESG considerations, businesses should carefully evaluate whether planned capital expenditures may qualify for these incentives.

Likewise, homeowners considering solar installations may wish to accelerate their investment plans to take advantage of the available tax benefits before the incentive period expires on 31 December 2028.

As with any tax incentive, careful planning and documentation are essential. Taxpayers should ensure that all eligibility requirements are satisfied and that appropriate supporting documentation, including VAT invoices and e-Tax invoices, is properly maintained.

MPG’s tax and accounting professionals are available to assist individuals and businesses in assessing eligibility, structuring qualifying investments, and ensuring compliance with the applicable tax requirements.