EPC · Own Day 1
Pay 100% CapEx upfront; factory owns the asset Day 1. Stack BOI Section 7.1 (8-yr CIT) + Section 30 + EEC +50%. 5-yr straight-line depreciation. Payback 4-6 yr; highest 15-yr ROI.
3-Way Comparator · TFRS 16 · BOI Sec 30
Solar Lease vs Self-Invest vs PPA — Thailand Factories 2026
Thailand's only 3-way solar decision guide: 15 dimensions + 15-yr cashflow for a 2 MW factory. Covers TFRS 16 lease accounting, BOI Section 30 stacking, and the CFO-persona decision tree.
15 dimensions15-yr cashflowTFRS 16 + BOI
14-min read · updated 2026-04-24
Disclaimer
All cashflow, CapEx, and tax-savings numbers are illustrative. Based on 2026-Q1 BOI category list + TFRS 16 (FAP) + ERC TOU peak THB 3.88-3.95/kWh. Consult a BOI-approved advisor and Thai CPA before any decision.
Answer in one paragraph
EPC, PPA, and Operating Lease are Thailand's three main factory solar financing models. EPC = factory pays full CapEx and owns the asset Day 1 (typical THB 25-35M per MW). PPA = provider owns the asset; factory pays only per-kWh at THB 2.70-3.55/kWh, 10-30% below grid, 15-20 yr. Operating Lease = 5-10 yr rental with end-of-term buyout option (TFRS 16 on-balance-sheet).
The 3 Models: EPC · PPA · Lease
Each model fits a different CFO profile. The wrong choice costs THB 20-50M over 15 years. This guide isn't long for length — the goal is to help a CFO decide in one meeting.
PPA · 0 CapEx
Operator (IPP) funds 100%. Factory signs 15-20 yr power purchase at THB 2.70-3.55/kWh fixed (10-30% below grid). Operator absorbs O&M + performance risk. Under TFRS 16, classified as a service contract, not a lease (off-balance-sheet).
Operating Lease · 5-10 yr
Flat monthly rental, 5-10 yr term, pre-agreed buyout schedule. Under TFRS 16, on-balance-sheet (ROU asset + lease liability). Flexible end-of-term: return / buyout / renew. Best for CFOs with mid-tenor plant-life uncertainty.
15-Dimension Comparator
Every cell backed by evidence. Click each row for rationale. Green = best · amber = mid · blue = situational.
| Dimension | EPC (Own) | PPA (Operator) | Operating Lease |
|---|---|---|---|
| Upfront CapEx | 100% · THB 25-35M per MW | THB 0 | 10-15% security deposit |
| Asset ownership | Factory Day 1 (permanent) | Operator · transfer yr 15-20 (THB 1) | Lessor · buyout option per schedule |
| O&M responsibility | Factory (or 3rd-party ~THB 80-120K/MW/yr) | Operator 100% (bundled in THB/kWh) | Lessor 100% (bundled in rental) |
| Performance / generation risk | Factory bears (minus 12-mo warranty) | Operator 100% (Performance Ratio guarantee) | Shared — depends on SLA |
| Tariff hedge tenor | Self-generation (25-yr hedge = system life) | THB 2.70-3.55/kWh fixed 15-20 yr (10-30% discount) | Flat monthly rental · 5-10 yr fixed |
| Early termination | N/A — factory owns the asset | NPV-based buyout · 30-50% penalty on remaining NPV | Pre-agreed buyout schedule (early-exit table) |
| BOI Sec 30 / 7.1 eligibility | Yes — factory holds CapEx, claims full 8-yr CIT exemption | No — Operator claims (not the factory) | Partial — only if Finance-Lease structure (ROU + bargain-purchase) |
| Tax / depreciation treatment | 5-yr straight-line depreciation + BOI exemption | 100% OpEx (fully tax-deductible) | OpEx rental (Operating Lease) · ROU + interest split (Finance Lease) |
| Balance-sheet / TFRS 16 | Asset + no debt (cash-funded) · no D/E impact | Off-balance-sheet (service contract — no lease) | On-balance-sheet — ROU asset + lease liability · D/E impact |
| End-of-term outcome | Asset operates 20-25 more yrs (high residual value) | Transfer at THB 1 or renew 5-yr | Return / buyout / renew |
| Buyout pathway | N/A — already owned | Yr 7-10 · fair-market value (FMV) calc | Pre-agreed buyout schedule in contract |
| 5-yr cashflow (2 MW factory) | -60M → +22M net | 0 → +18M savings | -3M → +14M savings |
| 10-yr cumulative | +48M net | +40M savings | +30M savings |
| 15-yr cumulative | +120M (asset + savings) | +68M (savings only) | +52M (post-buyout) |
| Who this model fits | Cash-rich CFO wanting max ROI + BOI benefits | Cash-constrained factory · OpEx simplicity | Mid-tenor plant uncertainty · may relocate |
15-Yr Cashflow · 2 MW Factory
Assumptions: 2.2M kWh/yr generation · grid TOU THB 3.95/kWh · PPA rate THB 2.80/kWh · 12% discount · 20% CIT · post-BOI CapEx THB 60M (2 MW @ 30M/MW)
| Year | EPC cum (THB) | PPA cum (THB) | Lease cum (THB) | Notes |
|---|---|---|---|---|
| Year 0 (start) | -฿60M | ฿0 | -฿3M | EPC deploys 60M cash · PPA uses none · Lease posts 3M deposit |
| Year 5 | +฿22M | +฿18M | +฿14M | EPC payback reached; all 3 models turn positive |
| Year 10 | +฿48M | +฿40M | +฿30M | EPC pulls ahead of PPA · Lease mid (buyout window yr 7-10) |
| Year 15 | +฿120M | +฿68M | +฿52M | 15-yr spread · EPC +120M · PPA +68M · Lease +52M (buyout-dependent) |
Bottom line: with cash, EPC wins by +52M over 15 yr. Without cash, PPA beats Lease by +16M. Lease wins when plant-life certainty is below 15 yr.
Decision Tree · 4 CFO Scenarios
Pick the condition matching your factory — get a recommended model with rationale. Based on a 2 MW factory. Scale with the PPA vs Self-Invest calculator. Not sure what solar EPC means? Read the full solar EPC guide first. Or see how both models are actually delivered on our combined EPC and PPA services page.
Hybrid Models · 2 Pathways
Sophisticated Thai firms increasingly use 2 hybrid pathways to get both worlds. Both require tighter contract negotiation. Warning: legal + financial advisory costs ~10-15% higher than a straight deal.
Path A · PPA → EPC Buyout Yr 7-10 (FMV)
Sign PPA 15-20 yr with a buyout clause at yr 7-10 at fair-market value (FMV). First 7 yr = OpEx immediate savings. After buyout = factory owns asset + partial BOI Section 30. FMV calc uses residual PV value (NPV method). Tip: lock the FMV formula (discount rate + residual-life assumption) in the contract before signing.
Path B · Lease-to-Own (bargain-purchase THB 1)
Finance-Lease structure; rent for 7-10 yr with rental schedule covering ~95% of CapEx + residual. End-of-term buyout at THB 1. Under TFRS 16, classified as finance lease → factory qualifies for BOI Section 30 (ROU asset substance). Best for factories wanting long-run ownership but smoothed short-term cashflow.
⚠️ BOI Section 30 Stacking: only when factory holds "asset title" or ROU with substance transferring controlling interest. Consult a BOI-approved advisor + CPA first.
TFRS 16 Lease Accounting · Balance-Sheet Impact
TFRS 16 (issued by FAP — Federation of Accounting Professions; aligned with IFRS 16; effective 2020) requires leases > 12 months + non-low-value to be booked as Right-of-Use (ROU) asset + lease liability on-balance-sheet. The three models have distinctly different impacts.
EPC · Factory-owned asset (no lease). Booked as Property, Plant & Equipment (PP&E). Depreciated straight-line 5 yr (with BOI) or 20 yr (standard). No D/E impact.
PPA · Service contract (NOT a lease) — because the operator does not transfer the "right to control" the asset to the factory. Monthly electricity = OpEx. Off-balance-sheet. Suits CFOs wanting low D/E ratio (e.g. pre-IPO).
Operating Lease · on-balance-sheet per TFRS 16. Dr ROU asset + Cr lease liability equal to PV of all rentals. Monthly rental split into interest + principal. Increases both total asset + total liability → affects D/E ratio. Finance Lease is similar but with faster depreciation.
Sources: FAP — Thai Financial Reporting Standard 16 TFRS 16 · PwC Thailand TFRS 16 guide · KPMG Thailand Leases Handbook
HowTo · 4-Step CFO Decision Framework
Step 1 · Answer the cash question
Can the CFO free up unrestricted cash ≥ CapEx (2 MW = THB 60M) in the budget? If no — go PPA or Lease. If yes — go to Step 2.
Step 2 · Check BOI eligibility
Does the factory have DBD + DIW Ror Ngor 4 license + plant age ≤ 10 yr? If yes, eligible for BOI Sec 7.1 + Sec 30 + EEC +50% → EPC is #1 choice. If no — Operating Lease or PPA.
Step 3 · Assess plant-life certainty
Will the factory still be at this site in 15 yr? If yes: EPC (own) or PPA (service). If no: Operating Lease + buyout flexibility. If pre-IPO: PPA to keep balance sheet clean.
Step 4 · Stress-test with tool + CPA review
Use PPA vs Self-Invest calculator with your real numbers (CapEx, grid rate, PPA rate, WACC, tax rate). Get NPV for all 3 models, then consult a Thai CPA to verify TFRS 16 classification before signing. CapSolar free consultation covers every scenario.
Author note
By Frank Lee · Founder, CapSolar. Our team has delivered 80+ MWp across 150+ projects in Thailand. I've seen 12+ CFOs pick the wrong model because they didn't understand TFRS 16 + BOI stacking. This article is what I wish I had when I started this journey 4 years ago.
Reviewed by: Chief Engineer · CapSolar (2026-04-24)
Frequently Asked Questions
If plant-life certainty ≥15 yr → PPA wins (10-30% Day 1 savings, off-balance). If 5-10 yr or uncertain → Lease better (flexible end-of-term + buyout option). Pre-2033 IPO plan → PPA always wins (keeps D/E low). Use the PPA vs Self-Invest calculator with your real numbers.
Generally PPA = service contract, NOT a lease, because operator doesn't transfer "right to control" the asset. Exception: if the contract gives the factory direct control of the system (choose output times, specify maintenance), it may be reclassified as a lease → must book ROU + lease liability. Have a Thai CPA review the PPA contract before signing. Ref: PwC Thailand 2023 "PPA under TFRS 16" circular.
Partially — depends on structure. Finance Lease (bargain-purchase THB 1 + ROU ownership-substance) qualifies factory for Section 30. Pure Operating Lease (return asset, no buyout guarantee) does NOT — BOI doesn't treat factory as CapEx investor. See BOI solar incentives 2026 guide.
PPA rate = fixed 15-20 yr. If grid drops → factory has opportunity loss (paying above market). But Thai grid tariff trajectory has been rising for 10 yr (Gulf gas depletion + LNG import costs). ERC 2026-2036 forecast: +4-6%/yr. PPA fixed rate hedges inflation. Two-way protection: most contracts have a price adjustment clause (±10% band vs grid movement).
Lease rental = flat THB/MW/month (typically 150-220K/MW/mo for 5-10 yr term). Different from PPA's pay-per-kWh. Normalize: 2 MW factory, 2.2M kWh/yr. Lease: 180K/MW × 2 × 12 = THB 4.32M/yr (lease only, ex-tax). PPA: 2.2M kWh × 2.80 = THB 6.16M/yr. **PPA is ~42% more expensive than Lease** — but PPA includes grid backup + O&M + performance guarantee. Lease means factory buys grid electricity during low-sun + lessor covers O&M uptime only (not generation).
Three options: (1) Bank loan 70-80% LTV at 5.5-8.5% interest (EXIM Green Loan / KBank K-Energy / Krungsri / SCB / BBL offer solar loan products) — still EPC (factory owns asset) but uses external cash. (2) BOI-backed financing — after BOI promotion certificate, bank finance is easier + cheaper. (3) Hybrid PPA → EPC buyout yr 7-10 (see Path A above). All three let the CFO capture max EPC ROI without tying up working capital. See the Thai bank rates + 25-yr NPV 4-scenario guide.
Want CapSolar to model all 3 scenarios with your numbers?
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