Thai Customs Exchange Rates

[Tarric]

My company is currently in the processing of starting up operations in Thailand to sell solar panels and install solar power systems but that is as they say another story.

What I was wondering is when Thai customs calculates the duty on an item what exchange rate do they use to convert the items value in USD to Thai baht. If anyone knows anything about what system they use it would be greatly appreciated.

[h90]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

[Tarric]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Yeah I figured as much, i'm just glad solar panels are import duty exempt otherwise it could be quite the spanner in the works. Ah well I suppose i'll find out more when I get back to Thailand and I can speak to a shipping agent.

Also its a massive plug and a massive longshot but if anyone knows someone who works in a Solar company in Thailand who might even be the tiniest bit interest in getting some high quality and very cheap Solar Panels just PM me and we can have a bit of a chat about it. I'm sure we could work out some sort of compensation for your time if things pan out with your acquaintance or friend.

[robblok]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

[Tarric]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

Thankfully solar panels are import duty and excise duty exempt and ad valorem (aka estimated value) could be applied to those types of taxes, however I thought VAT was purely based upon the actual cost of the goods (eg. USD x Forex rate) not the ridiculous value Thai customs actually gives them? I could be mistaken of course.

[robblok]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

Thankfully solar panels are import duty and excise duty exempt and ad valorem (aka estimated value) could be applied to those types of taxes, however I thought VAT was purely based upon the actual cost of the goods (eg. USD x Forex rate) not the ridiculous value Thai customs actually gives them? I could be mistaken of course.

What is the problem with VAT ? Vat should never influence a business. Take it from an accountant.

You pay VAT at the customs then you just deduct that vat from the VAT you have to pay on your sales.

[Tarric]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

Thankfully solar panels are import duty and excise duty exempt and ad valorem (aka estimated value) could be applied to those types of taxes, however I thought VAT was purely based upon the actual cost of the goods (eg. USD x Forex rate) not the ridiculous value Thai customs actually gives them? I could be mistaken of course.

What is the problem with VAT ? Vat should never influence a business. Take it from an accountant.

You pay VAT at the customs then you just deduct that vat from the VAT you have to pay on your sales.

Yeah I know, i'm just a bit of a freak when it comes to perfection when it comes to my numbers, I just like to know how everythings going to play out to the nearest baht if possible

[craigt3365]

Why don't we move this over to the Business Forum. OK?

[p_brownstone]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

Thankfully solar panels are import duty and excise duty exempt and ad valorem (aka estimated value) could be applied to those types of taxes, however I thought VAT was purely based upon the actual cost of the goods (eg. USD x Forex rate) not the ridiculous value Thai customs actually gives them? I could be mistaken of course.

Thai Customs Department is now far more professional and hassle free than it used to be - for the past 10 years or more I have never had a case where the value shown on the Commercial Invoice was disputed by them.

You will however be charged VAT on the value of the goods, plus the Freight Charges, plus a "notional" 5% for Insurance.

However as already pointed out, once you sell the equipment and add the 7% VAT on your Sales Value, this is netted off against whatever you paid for VAT on Import and you simply pay the difference to the Revenue Department evey month.

Patrick

[sulasno]

I'm interested in more info on solar panels

[h90]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

No, they don't estimate. We have imports every week and Thai customs is 100 % correct on these. They follow the included invoice, as long as it is not obvious fake.

You pay tax on the landed price which is what product costs when it arrives at customs, that includes the transport.

[h90]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

Thankfully solar panels are import duty and excise duty exempt and ad valorem (aka estimated value) could be applied to those types of taxes, however I thought VAT was purely based upon the actual cost of the goods (eg. USD x Forex rate) not the ridiculous value Thai customs actually gives them? I could be mistaken of course.

Thai Customs Department is now far more professional and hassle free than it used to be - for the past 10 years or more I have never had a case where the value shown on the Commercial Invoice was disputed by them.

You will however be charged VAT on the value of the goods, plus the Freight Charges, plus a "notional" 5% for Insurance.

However as already pointed out, once you sell the equipment and add the 7% VAT on your Sales Value, this is netted off against whatever you paid for VAT on Import and you simply pay the difference to the Revenue Department evey month.

Patrick

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

[h90]

There is a special exchange rate for customs which has an extra safety margin and will not be changed daily.

I don't know the exact system, but you loose on it. So customs duty and VAT will be higher than you expect it due to the "wrong" exchange rates.

Not only that they will estimate the value of your product in Thailand. It does not matter what you paid for it. You pay tax over their estimate of value + transport.

Thankfully solar panels are import duty and excise duty exempt and ad valorem (aka estimated value) could be applied to those types of taxes, however I thought VAT was purely based upon the actual cost of the goods (eg. USD x Forex rate) not the ridiculous value Thai customs actually gives them? I could be mistaken of course.

If the invoices are clear and correct and should not show any additional discounts. And the invoice really need to show the customs tariff number. Without the correct tariff number the customs clearance agent put what they think and they are of course neither a specialist on technical products, nor want to waste money, nor understand how the tariff number system works. A good way for them, is put a number which has to pay some duty, so the customs officer does not question anything.

If you have an invoice with the product, lets say it is called "Solar +" for 10.000 USD and on the bottom you get your wholesale 50 % discount than you are in trouble.

They will clear it with any tariff number between nuclear power plant and suncream and value 10.000 USD (not calculating your discount)+transport.

All my supplier need to email me the invoice first and send out only after confirmation.

If you come with documents which aren't clear or seem to be fake you are in big troubles. Everything must be from the beginning to the end transparent and clear and correct.

[Tarric]

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

Thats encouraging to hear. If you have a shipping agent that you could put me into contact with that you use for your dealings with Thai customs that would be greatly appreciated if possible

Edit: I understand, the tariff number really seems to be the key these days.My company prides itself on transparency and honourable dealings so fake invoices will not be a problem. I will definetly make sure however that someone in the know takes care of all of the dealings with customs to make sure things run smoothly.

Edited August 20, 2011 by Tarric

[p_brownstone]

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

Yes of course you would also pay VAT on the Duty - I did not mention that in my Post because the OP has said a couple of times that his Product is rated at 0% for Import Duty.

VAT is calculated on C.I.F. value (Cost, Insurance and Freight) plus any Duty charged, and the Thai Customs Department adds a notional 0.5% (not 5% as in my earlier Post - sorry a typo!) before calculating the VAT - they do not, however, ask you to pay the Insurance they calculate.

Patrick

[Tarric]

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

Yes of course you would also pay VAT on the Duty - I did not mention that in my Post because the OP has said a couple of times that his Product is rated at 0% for Import Duty.

VAT is calculated on C.I.F. value (Cost, Insurance and Freight) plus any Duty charged, and the Thai Customs Department adds a notional 0.5% (not 5% as in my earlier Post - sorry a typo!) before calculating the VAT - they do not, however, ask you to pay the Insurance they calculate.

Patrick

Thanks for clarifying the notional insurance cost, I was a bit worried when you said 5%. What exactly does the notional insurance cover if anything?

[h90]

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

Thats encouraging to hear. If you have a shipping agent that you could put me into contact with that you use for your dealings with Thai customs that would be greatly appreciated if possible

Edit: I understand, the tariff number really seems to be the key these days.My company prides itself on transparency and honourable dealings so fake invoices will not be a problem. I will definetly make sure however that someone in the know takes care of all of the dealings with customs to make sure things run smoothly.

If you have a company and someone who isn't too silly, I recommend to do the clearing yourself (I mean your Thai person). Once you figured out how it works, that will save you a lot money and is pretty easy. Many of the clearing agents does not do the clearing, they just fax the documents to the people who sit close to the customs and do the clearing. Once you know these guys, you just fax them the things, explain it, than transfer the money to them and go there and pick it up (there are truck rent, car rent, etc etc everything together. I got told it is confusing the first time and than very simple. My wife went there once and did everything herself and the people there help for free, she of course tipped everyone with a few hundred Baht. Now she has all the phone numbers. Call...fax the documents....confirm the filled out form....transfer the money....go there and pick up, or tell them to rent a truck and bring it. Easy, cheap, smooth....

[p_brownstone]

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

Yes of course you would also pay VAT on the Duty - I did not mention that in my Post because the OP has said a couple of times that his Product is rated at 0% for Import Duty.

VAT is calculated on C.I.F. value (Cost, Insurance and Freight) plus any Duty charged, and the Thai Customs Department adds a notional 0.5% (not 5% as in my earlier Post - sorry a typo!) before calculating the VAT - they do not, however, ask you to pay the Insurance they calculate.

Patrick

Thanks for clarifying the notional insurance cost, I was a bit worried when you said 5%. What exactly does the notional insurance cover if anything?

It covers nothing at all, there is no Insurance Policy issued by anyone, it is simply a figure the Thai Customs Department uses to add to the C & F vaue shown on the Commercial Invoice which they assume would have been the Insurance Premium if you had Insured the shipment. You do not pay it, either to the Customs Department or the "presumed" Insurance Company, you only pay VAT on it.

Patrick

[Tarric]

It covers nothing at all, there is no Insurance Policy issued by anyone, it is simply a figure the Thai Customs Department uses to add to the C & F vaue shown on the Commercial Invoice which they assume would have been the Insurance Premium if you had Insured the shipment. You do not pay it, either to the Customs Department or the "presumed" Insurance Company, you only pay VAT on it.

Patrick

Oh okay that makes more sense thanks for the information.

You make a good point H90, I think at first I will use a friends shipping agent but once its all been established then I think one of my companys trustworthy Thai employees can take care of it. I appreciate the advice from all of you its been very helpful.

[h90]

Well it is:

(product+transport)*wrong exchange rate for the duty

than from this you pay the VAT.

So you pay VAT from the duty.

There is no Insurance or money under the table, but a few fees which are real for which official invoices will be issued.

Yes of course you would also pay VAT on the Duty - I did not mention that in my Post because the OP has said a couple of times that his Product is rated at 0% for Import Duty.

VAT is calculated on C.I.F. value (Cost, Insurance and Freight) plus any Duty charged, and the Thai Customs Department adds a notional 0.5% (not 5% as in my earlier Post - sorry a typo!) before calculating the VAT - they do not, however, ask you to pay the Insurance they calculate.

Patrick

Thanks for clarifying the notional insurance cost, I was a bit worried when you said 5%. What exactly does the notional insurance cover if anything?

It covers nothing at all, there is no Insurance Policy issued by anyone, it is simply a figure the Thai Customs Department uses to add to the C & F vaue shown on the Commercial Invoice which they assume would have been the Insurance Premium if you had Insured the shipment. You do not pay it, either to the Customs Department or the "presumed" Insurance Company, you only pay VAT on it.

Patrick

Interesting, never noticed that. So it does not happen on CIF shipments, right?

[h90]

It covers nothing at all, there is no Insurance Policy issued by anyone, it is simply a figure the Thai Customs Department uses to add to the C & F vaue shown on the Commercial Invoice which they assume would have been the Insurance Premium if you had Insured the shipment. You do not pay it, either to the Customs Department or the "presumed" Insurance Company, you only pay VAT on it.

Patrick

Oh okay that makes more sense thanks for the information.

You make a good point H90, I think at first I will use a friends shipping agent but once its all been established then I think one of my companys trustworthy Thai employees can take care of it. I appreciate the advice from all of you its been very helpful.

Welcome....we learned it the hard way, till we found out that the problem is not the thai customs it is that every idiot who recognize a container is calling himself shipping agent. When someone like that comes with some half true half fake documents and dogy explanations than the customs officer is angry for wasting their time and every explanation will be seen as possible new fake.

Keeping everything correct and everything is simple. Starting with strange documents and strange explanations and you get problems.

I forgot, a shipment must contain a packing list as well. Reason is: if customs want to see 1 item, they don't want to search 20 boxes.

Isn't the electric in Thailand too cheap to make Solar Cells competitive?

[Tarric]

Welcome....we learned it the hard way, till we found out that the problem is not the thai customs it is that every idiot who recognize a container is calling himself shipping agent. When someone like that comes with some half true half fake documents and dogy explanations than the customs officer is angry for wasting their time and every explanation will be seen as possible new fake.

Keeping everything correct and everything is simple. Starting with strange documents and strange explanations and you get problems.

I forgot, a shipment must contain a packing list as well. Reason is: if customs want to see 1 item, they don't want to search 20 boxes.

Isn't the electric in Thailand too cheap to make Solar Cells competitive?

With the current push for 20% of Thailands Power to be created by renewable energy by 2022 technologies like Solar are taking off in a big way. Up until June this year the government was offering 11bht per kw/h that any given system put back into the grid, so for example a base 2.0Kw system would be returning somewhere in the region of 10% p.a if you just sold all the power back into the grid. Solar farms especially are very popular with investors as the returns can be 15-20% p.a because of the premium paid for power created by renewable technologies.

Also the current government is considering upping the money paid for residentially created Solar energy to 13bht per kw/h. So not only is it a way to be green but in Thailand its also a viable investment opportunity provided the government comes good with the subsidies.

[rakman]

Welcome....we learned it the hard way, till we found out that the problem is not the thai customs it is that every idiot who recognize a container is calling himself shipping agent. When someone like that comes with some half true half fake documents and dogy explanations than the customs officer is angry for wasting their time and every explanation will be seen as possible new fake.

Keeping everything correct and everything is simple. Starting with strange documents and strange explanations and you get problems.

I forgot, a shipment must contain a packing list as well. Reason is: if customs want to see 1 item, they don't want to search 20 boxes.

Isn't the electric in Thailand too cheap to make Solar Cells competitive?

With the current push for 20% of Thailands Power to be created by renewable energy by 2022 technologies like Solar are taking off in a big way. Up until June this year the government was offering 11bht per kw/h that any given system put back into the grid, so for example a base 2.0Kw system would be returning somewhere in the region of 10% p.a if you just sold all the power back into the grid. Solar farms especially are very popular with investors as the returns can be 15-20% p.a because of the premium paid for power created by renewable technologies.

Also the current government is considering upping the money paid for residentially created Solar energy to 13bht per kw/h. So not only is it a way to be green but in Thailand its also a viable investment opportunity provided the government comes good with the subsidies.

I'm curious about the cost / watt of your panels delivered, and the program. To collect the money you need either land, or gullible home owners to share the cost/benefit?

Typical prices are $4 /watt (118 baht/watt) without shipping. Even at scratch and dent at $0.74/watt (22 baht/watt) its pricey, but supply is limited. For 2kw, you'll need about 135 sq ft (12.5 sqm) of collector.

The installation needs a grid-tie inverter, rather pricy.

For a 2kw setup, high panel price would be around 224,000 baht plus ~$2000 ( 59,500 baht) grid-tie inverter, plus installation, wiring, permits, etc. Total around 300,000 baht.

At the low side, panels at 44,000, inverter, installation etc say 125,000 baht, probably in either case, low since nothing in construction costs as expected.

Let's assume fixed solar panels, you won't get peak power all day, so let's assume 6 hr/day for decent power generation. That gives 4,380 kw-hr of power per year. At 11baht/kw-hr that's a return of 48,200 baht per year. Now factor in siting, (trees, vegetation) rain and clouds, income would be less. Plus you'll need a staff to service and repair.

So the simple hardware ROI is between 3 to 6 years, assuming no disasters, goats climbing on the panels, buffalo scratching their backs and dozens of unknowns. Staffing and transportation costs dilute this. Plus, the panels will need to be cleaned at some interval.

Now all you need is a grand government subsidy to fund the hardware cost and installation and it may not be a bad deal for a few years IMHO.

[sulasno]

Typical prices are $4 /watt (118 baht/watt) without shipping.

I think it's much lower currently

[p_brownstone]

With the current push for 20% of Thailands Power to be created by renewable energy by 2022 technologies like Solar are taking off in a big way.

Well frankly anyone who relies on a purported Thai Governments’ “push” as an incentive for a significant Investment is taking far more of a risk than I would.

Also the current government is considering upping the money paid for residentially created Solar energy to 13bht per kw/h. So not only is it a way to be green but in Thailand its also a viable investment opportunity provided the government comes good with the subsidies.

[/quote

See above.

The “current government” has barely got its feet under the table, they have far more important things to consider than so called “green energy”.

Finally, as far as I understand the technology to date, the huge acreage required to accommodate a Solar Photovoltaic Farm sufficient to provide any significant Power would be much better utilised to produce grain or raise livestock in a productive agricultural environment such as Thailand.

Patrick

[Tarric]

I'm curious about the cost / watt of your panels delivered, and the program. To collect the money you need either land, or gullible home owners to share the cost/benefit?

Typical prices are $4 /watt (118 baht/watt) without shipping. Even at scratch and dent at $0.74/watt (22 baht/watt) its pricey, but supply is limited. For 2kw, you'll need about 135 sq ft (12.5 sqm) of collector.

The installation needs a grid-tie inverter, rather pricy.

For a 2kw setup, high panel price would be around 224,000 baht plus ~$2000 ( 59,500 baht) grid-tie inverter, plus installation, wiring, permits, etc. Total around 300,000 baht.

At the low side, panels at 44,000, inverter, installation etc say 125,000 baht, probably in either case, low since nothing in construction costs as expected.

Let's assume fixed solar panels, you won't get peak power all day, so let's assume 6 hr/day for decent power generation. That gives 4,380 kw-hr of power per year. At 11baht/kw-hr that's a return of 48,200 baht per year. Now factor in siting, (trees, vegetation) rain and clouds, income would be less. Plus you'll need a staff to service and repair.

So the simple hardware ROI is between 3 to 6 years, assuming no disasters, goats climbing on the panels, buffalo scratching their backs and dozens of unknowns. Staffing and transportation costs dilute this. Plus, the panels will need to be cleaned at some interval.

Now all you need is a grand government subsidy to fund the hardware cost and installation and it may not be a bad deal for a few years IMHO.

Our estimates for power generation are based upon a conservative 4.5 hours of good sunlight per day as we want customers to definetly get what is advertised to the best our ability.

My company's 2.0KW system is going to be priced at roughly 300,000bht (inc VAT) give or take as pricing has not yet been finalised. This is actually quite reasonable as our market research has not yet found a competitor in the market with a 2.0KW system under 400,000bht and the majority wanting at least 600,000-700,000bht.

All panels are not created equal for example a domestically made 13% effeciency panel vs my companys 15.27% effeciency panel there is a difference of nearly 18% in power generation capabilities, you multiply that over the life of any given system thats a lot of lost income.

I don't see my prospective customers as gullible homeowners, yes the set up cost is quite high but witihin 10 years the system has paid for itself and then some. That calculation doesnt even include the all but certain increases in electricity costs that will actually be a net benefit to the system owner.

My company is currently concerntrating on more residential based system on homeowners roof's for example and also on commercial buildings where there is unused roof space.

Also current panel retail pricing seems to be about 100bht per W, sometimes you might find something just into the 90's but most of the time i've found its bang on 100bht.

See above.

The "current government" has barely got its feet under the table, they have far more important things to consider than so called "green energy".

Finally, as far as I understand the technology to date, the huge acreage required to accommodate a Solar Photovoltaic Farm sufficient to provide any significant Power would be much better utilised to produce grain or raise livestock in a productive agricultural environment such as Thailand.

Patrick

The subsidies have been in planning with the NEPC (National Energy Policy Council) ever since the Somchai government, both parties wanted to implement the legislation but it seems with all the political turmoil they never found the time. A reasonably reliable source tells me they are going to be implementing the new system of subsidies early next year but with the ever changing political situation in Thailand you can never really be sure of anything.

With my companys panels a single square metre of land would create roughly 1,444kw/h of electricity based upon less than ideal conditions, so that would be a return of 15,884bht at 11bht per kw/h.

My mothers land she rents to farmers returns at the most 10,000bht per rai per year, now I know another landowner could get more money but its not going to be anywhere near 15,884bht per sqm per year.

So based upon 1 rai for example which is 1600sqm you could potentially return 25,414,400bht per year. Now this is purely based upon every square metre of the land being taken up but this is merely an exercise to point out that Solar farms are not only viable with current technologies but also profitable.

With those sorts of returns an investor could make back their initial investment in roughly 5 years and from then on it would be pure profit.

[rakman]

With my companys panels a single square metre of land would create roughly 1,444kw/h of electricity based upon less than ideal conditions, so that would be a return of 15,884bht at 11bht per kw/h.

My mothers land she rents to farmers returns at the most 10,000bht per rai per year, now I know another landowner could get more money but its not going to be anywhere near 15,884bht per sqm per year.

So based upon 1 rai for example which is 1600sqm you could potentially return 25,414,400bht per year. Now this is purely based upon every square metre of the land being taken up but this is merely an exercise to point out that Solar farms are not only viable with current technologies but also profitable.

With those sorts of returns an investor could make back their initial investment in roughly 5 years and from then on it would be pure profit.

Insolation is about 1kw/sqm. At 15.7% efficiency, optimized angle and 4.5 hours (commendable estimate) of full sun per day on a 1 sqm panel you get about 258 kw-hr/yr and at 11baht/kw-hr is 2836 baht/yr-sqm. So 1 rai could give about 4,538,500 baht, less inverter efficiency. Plus you'd need an investment of over 30,000,000 baht,

For a 2 kw system you'll need about 12.7 sq m of panel space. 300,000 baht for the 2kw system might be a bit on the cheap side to fund the company, IMHO.

[Tarric]

With my companys panels a single square metre of land would create roughly 1,444kw/h of electricity based upon less than ideal conditions, so that would be a return of 15,884bht at 11bht per kw/h.

My mothers land she rents to farmers returns at the most 10,000bht per rai per year, now I know another landowner could get more money but its not going to be anywhere near 15,884bht per sqm per year.

So based upon 1 rai for example which is 1600sqm you could potentially return 25,414,400bht per year. Now this is purely based upon every square metre of the land being taken up but this is merely an exercise to point out that Solar farms are not only viable with current technologies but also profitable.

With those sorts of returns an investor could make back their initial investment in roughly 5 years and from then on it would be pure profit.

Insolation is about 1kw/sqm. At 15.7% efficiency, optimized angle and 4.5 hours (commendable estimate) of full sun per day on a 1 sqm panel you get about 258 kw-hr/yr and at 11baht/kw-hr is 2836 baht/yr-sqm. So 1 rai could give about 4,538,500 baht, less inverter efficiency. Plus you'd need an investment of over 30,000,000 baht,

For a 2 kw system you'll need about 12.7 sq m of panel space. 300,000 baht for the 2kw system might be a bit on the cheap side to fund the company, IMHO.

My bad, for some reason I did the math based upon 1kw equalling 1sqm for some reason, haven't had my weety bix this morning it would appear

Based on the pricing I've seen in large panel buying operations panels can be had for 18-20k per panel so for 1 rai totally covered in panels would cost between 18-20million baht for the panels plus wiring and inverters etc (based upon 1,000 1.6m2 panels)

You may very well be correct we're currently assessing demand to determine our pricing and profit margins, perhaps my costings are too generous to the consumer and may have to be revised.

If you don't mind me asking do you work in the solar industry? you very much seem to know your stuff. If you could be of any assistance in this endeavour PM me and we can discuss this further

[Julaluck]

http://www.customs.go.th/Exchange/Print_exchange.jsp?strget=1&month=08&year=2011& yy=2554&mth=8

Customs exchange rate August 2011