Thai Energy Ministry plans sweeping tariff revamp for June bills

The Ministry of Energy is pressing ahead with a major overhaul of the entire electricity tariff structure for the first time in more than 20 years. Its plan to introduce a new tiered tariff structure is creating ripples for households using more than 400 units a month and for the business sector.

The planned reform of the overall energy price structure will be submitted to the National Energy Policy Council (NEPC) on Wednesday (April 29, 2026), before being presented to the Cabinet. The new electricity tariff structure is intended to take effect in time for the June 2026 billing cycle, under the policy of “use less, pay less; use more, pay more”.

Akanat Promphan, Energy Minister, said the Ministry of Energy was discussing the electricity tariff restructuring with relevant agencies. He said the main problem behind high electricity costs was power purchases from past renewable energy projects that received an Adder, or additional power purchase tariff, with a committed combined capacity of 4,000 megawatts, or 10% of the country’s total electricity generating capacity.

The projects receive a purchase rate of THB3-5 per unit, creating a cost burden in the automatic fuel adjustment tariff (Ft) of 20 satang per unit. The ministry is preparing to negotiate with private power producers to lower the price to a level appropriate to costs. If costs under the Adder scheme are reduced, electricity tariffs would fall by 10 satang per unit. The ministry has discussed legal preparations with the Office of the Attorney General in case disputes arise.

“Solar should not be above THB2.20 per unit. Biomass must be renegotiated because many projects have already recovered their investment. If talks do not work, they must be cancelled. If they sue, we are willing to face it, but we cannot allow electricity bills to remain expensive,” Akanat said.

New three-tier structure set to support low-use households

The government is preparing a new tiered electricity tariff structure covering 23.2 million households, with the target of starting in the June 2026 billing cycle. It will be divided into three main groups as follows:

1. Low-use consumers below 200 units (main target group): The focus will be on supporting small electricity users who use no more than 200 units per month, with the tariff capped at THB3 per unit. The group benefiting will cover 23.2 million households, divided into: The existing group using below 200 units, totalling 15.4 million households, and another 7.8 million households using more than 200 units, which will benefit from the restructuring.
2. Consumers using 201-400 units (normal-rate group): These are medium-use households charged at the normal tariff of THB3.95 per unit. This group comprises 4.6 million households.
3. Consumers using 401 units and above (group awaiting a new rate adjustment): High-use homes, covering 3.2 million households, will see the average rate rise from THB4.50 per unit to more than THB5 per unit, or an increase of THB1 per unit. Additional advice for this group is that consumers should consider installing solar cell systems as an option to save on power bills.

Akanat says heavy users drive high LNG imports

The existing tiered tariff structure has been in place for more than 20 years and does not reflect actual costs. Heavy electricity users have pushed the country to rely on natural gas for more than 60% of power generation and on LNG imports at a level of 30%, with costs fluctuating, especially during the Middle East crisis. Reducing LNG imports by 5-10% would cut the Ft by another 10 satang per unit.

At the same time, the government is pushing household solar cell installation, especially among those using 480-500 units or more, for whom the investment would be worthwhile. A 2-3kW system costs THB60,000. If paid in instalments over 10 years at 3% interest, the burden would be THB600 a month, while it would cut electricity bills by 300-400 units a month, or THB1,500 a month.

The Ministry of Energy will also discuss additional support options, such as using the central budget, funds from the electricity authorities and shortfall funds from PTT’s natural gas cost differential to reduce the Ft burden. The target is to reduce the average tariff to THB3.50 per unit in the next phase.

In addition, the long-term solution recommends that high-use households and the industrial sector accelerate the installation of solar rooftops, with government support as follows:

1. Tax measures: Costs can be used for tax deductions of up to THB200,000.
2. Funding sources: Low-interest loans will be arranged to reduce the initial investment burden. Payback is expected within 10 years, while monthly expenses would be cut by more than half.
3. Net Billing system: Surplus electricity will be purchased back into the system at THB2.20 per unit, which is more attractive than the purchase price from solar farms.
4. Facilitation: The permit process for installation will be accelerated through a One Stop Service system, reducing a process that may have taken years to just a few weeks, or within 30 days.

Power producers back the tiered tariff model

Nopadej Karnasuta, chairman of the Association of Private Power Producers (APPP), said the association welcomed the tiered electricity tariff restructuring policy that would cut the tariff for the first 200 units to THB3 per unit, covering 14 million households. It was ready to work with the government to drive energy structure reform towards concrete and sustainable results.

In addition, the association, representing small private power producers (SPPs) with a combined capacity of 9,050 megawatts, submitted an open letter to Ekniti Nitithanprapas, Finance Minister, and Akanat Promphan, Energy Minister, on Friday (April 3, 2026), to address five key energy problems:

1. Accelerating a transparent and timely Cost Pass-through mechanism
2. Setting a two-tier Ft to protect small electricity users
3. Restructuring gas prices towards a Single Pool Gas system
4. Promoting Demand Response in the Industrial Sector
5. Upgrading the energy crisis management mechanism by allowing the private sector to take part in the working group
6. FTI urges the government to separate production-sector tariffs

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), told Bangkokbiznews that the electricity tariff restructuring was a populist policy to reduce living costs for low-income and vulnerable groups. The FTI was concerned that if the government applied the tiered tariff model to the industrial sector, it would have a severe impact on heavy industries that are upstream producers.

Kriengkrai said the group using below 200 units, homes without air-conditioning or with few electrical appliances, would pay below THB3 per unit, cheaper than the previous rate of THB3.88.

The group using 201-400 units would pay the new rate of THB3.95, up 7 satang, while the group using more than 400 units would include large homes with high purchasing power, which the government sees as having the ability to pay and as a group that should be encouraged to install solar rooftops.

“From a social perspective, helping low-income earners is a good thing and addresses the issue directly, because it helps reduce expenses when incomes have not yet recovered. It also sends a signal to the public to save energy,” Kriengkrai said.

Industry needs a different package, not the same model

However, the government should not apply the logic of using more and paying more to industry in the same way as households, because businesses and factories have different electricity use patterns. This is especially true for SMEs, which may be small but often use more than 400 units. If they are put under the same criteria as large homes and have to pay expensive electricity bills, SMEs would be hit hard and may not survive.

In addition, large industries, particularly upstream industries such as steel, are energy-intensive. If the government has no subsidy policy or does not clearly separate electricity tariff rates, but instead increases costs, industries will lose competitiveness.

Concerns over security as the upstream industry faces pressure

The most worrying issue is that if domestic electricity costs become too high, operators will be unable to bear the burden, and Thailand will ultimately have to rely on imported goods, especially from China, where costs are lower. This is a matter of national strategic security.

“Upstream industries such as steel must exist in the country for security. If we rely only on imports, when war breaks out or global economic policy fluctuates, we will be in a very difficult position. The government must look at models abroad where these industries are supported, not charge more simply because they use more, because this is the starting point of all other industries,” Kriengkrai said.

FTI sets out three proposals to the government

The private sector is still awaiting clarity from the government on electricity tariff packages for the industrial and business sectors, and therefore proposes the following guidelines:

1. Separate the production-sector electricity tariff structure from the household sector, and do not use a tiered model that penalises high-volume users.
2. Support heavy industry. The government should provide subsidies or targeted assistance measures for industries that form basic infrastructure.
3. Additional measures for solar rooftops. Beyond encouraging installation, the state should provide investment support packages so that operators and large households can access them more easily and quickly.

Forced into “big homes helping small homes”

An energy academic told Bangkokbiznews that the mechanism for progressive electricity rates for residential homes was becoming clearer, serving as a tax and price measure to push consumers to use electricity more efficiently or push large users to reduce energy use.

The core of the policy is “big homes helping small homes”, using the difference to subsidise low-income earners or electricity users consuming no more than 200 units. Although the approach is good in terms of energy efficiency, it could become unfair for those who have no choice over when they use electricity.

“For people who have choices and capital, installing solar cells as advised by the government may be a way to reduce expenses. But for homes or businesses without choices, they are being forced to pay higher electricity prices,” the source said.

Shophouse SMEs most vulnerable in the new tariff cycle

The most worrying groups under this structure are not large industrial factories, because most factories use Time of Use (TOU) tariffs and can manage costs by shifting production to night-time. Instead, SMEs and mixed residential-business users, such as hair salons, cafes or shops in commercial buildings, are the groups likely to be hit hardest.

The source said shophouse businesses often use the lower floor for business and the upper floor as living space, meaning almost all electricity use falls under the progressive residential rate. Crucially, they cannot avoid peak times because customers use their services during the daytime, when electricity is most expensive, and they cannot work night shifts like factories.

Federation of Thai SMEs backs tiered tariffs

Sangchai Theerakulwanich, strategy chairman of the Federation of Thai SMEs, told Bangkokbiznews that setting electricity tariffs in three groups was a move in the right direction to help vulnerable people and low-income earners. Freezing electricity prices alone was not enough without proactive measures to create structural change in energy use.

He called for accelerated implementation of the “Thais unite to help the nation save energy” measure through integration among agencies in the three electricity authorities system, local administrative organisations, vocational colleges nationwide and state financial institutions. In particular, he called for low-interest funding sources, or soft loans, for households, the agricultural sector and SMEs, alongside efforts to build knowledge on efficient energy use.