1. Cambodian Solar Energy Policy Brief
for NRG Solutions
Overview: This document aims to provide a brief analytical summary report on the
current state of affairs in The Royal Government of Cambodia (RGC) with regard to their
development of solar energy policy–primarily focused on rural electrification. By
providing NRG Solutions with this brief analysis, the hope is that they may better
understand the functioning of current political mechanisms and how policy developments
will affect their social enterprise in the near future.
In general, the current situation is promising. Though a number of political barriers exist
to maximizing the full capability of solar electricity in Cambodia, the potential for growth
of the distributed solar market in the coming years provides an opportunity for both
public and private sector stakeholders to enjoy a mutually beneficial relationship.

2. 1. Introduction
(EIA 2015)
This map of current solar power plants in the United States shows exactly how influential
policy can be on the development of solar energy. As California, Massachusetts, New Jersey and
North Carolina are states providing a strong market environment for solar through policy
incentives and favorable net-metering laws, they have seen an exponential growth in their solar
industry relative to states with largely the same solar potential, at least geographically. By
creating a similarly ideal market environment for solar energy, Cambodia can see the same
growth experienced in the US and other countries around the world.
As will be discussed later, Cambodia has tremendous potential for the growth of solar in the
next decade for a number of reasons. Although some may see the lack of electrical grid
infrastructure in Cambodia as detrimental to overall economic growth, it provides a great
opportunity for the development of distributed renewable energy systems that are more
sustainable and environmentally friendly. Additionally, the still-developing nature of
Cambodia’s economy and infrastructure means that they have the oft-overlooked benefit of
employing newer, cheaper technologies and using pre-existing knowledge from the experiences
of already developed countries. However, Cambodia, in general, is in the early stages of
development of renewable energy resources compared to other countries in the region such as
Thailand, Singapore and Bangladesh.

3. 2. Solar Energy in Cambodia
2.1 Current Situation/Published Policy

4. As the infographic above from the Off-Grid Business Indicator Asia shows, there is a large
market potential for solar in Cambodia given its off-grid and under-serviced populations in
demand of electricity. However, the business environment continues to be only average as a
result of government factors including corruption and an inefficient bureaucracy.
According to their official National Policy on Rural Electrification by Renewable Energy, the
goal of RGC is to:
 Endeavor to provide access to reliable, safe electricity services, with insignificant impact
on the environment and at an affordable price for rural communities;
 Provide effective legal, regulatory frameworks and various encouragements and to train
the private sector to participate in providing electricity services by renewable energy in
the rural areas;
 Act as a market enabler, through various incentives, for enabling equity in access to
reliable and safe electricity services, with insignificant impact on the environment, at an
affordable price for the rural communities;
 Encourage the efficient generation, transmission and distribution of electricity using the
renewable energy technologies, through tariffs, which are in conformity with the
Electricity Authority of Cambodia (EAC)’s regulation;
 Promote electricity systems by renewable energy at least cost for rural communities,
through research and pilot development, as part of RGC’s portfolio on grid and off-grid
technologies; and
 Ensure adequate resources, appropriate institutional mechanisms and training to empower
the poor involving in rural electrification to participate.1
This policy language is broad and idealized yet clearly shows an understanding for the beneficial
effects of rural electrification–reduce poverty level, improve living standard, foster rural
economic development. This understanding leads to the promotion of ambitious yet achievable
rural electrification targets:
a. 100% village electrification by 2020
b. 70% household electrification with grid-quality electricity by 2030
1 MME. 2012

5. 2.2 Major Policy Actors
The chart above comes from the most recent Annual Report of the Electricity Authority of
Cambodia and lays out the structure of the government’s electricity sector.2
With regard to NRG Solutions, the most important role of EAC is the issuance of licenses for
electric power service providers. EAC issued the first such license in February 2002. The types
of license issued during the initial years were (i) Consolidate License consisting of Generation,
National Transmission and Distribution License (issued only to EDC), (ii) Generation License,
(iii) Distribution License and (iv) Consolidate License consisting of Generation and Distribution
License. The first Retail License was issued in July 2006.3
In addition to MME and EAC, the state owned electricity company, Electricité du Cambodge
(EDC), is a major player in Cambodian energy policy. Specifically for rural electrification, EDC
has a subsection called the Rural Electrification Fund (REF) which is “the creation of the RGC
and the World Bank, with the goal of encouraging the private sector for investment in electricity
supply to the rural population, with smart subsidies and Smart credit for reason of social
equity.”4 However, the majority of funding for the REF comes from social budget package
provided in the EDC’s electricity tariff.5
2 EAC. 2014. (The Ministry of Industry, Mines and Energy has now separated into two brances)
3 Ibid
4 Samy, Dr. Sat. “Rural Electrification by Renewable Energy in Cambodia”. MIME. 2005.
5 www.ref.gov.kh/page/aboutus 2013

6. 2.3 Future of Solar Energy in Cambodia
In order to understand the future of solar energy in Cambodia, it is essential understand the
nature of the variety of challenges it faces, including:
--Lack of economic development
- Given Cambodia’s underdevelopment economically, it is often deemed too expensive
for the country/people to afford; They lack the resources that developed countries
possess to make long term investments in projects such as solar that have high upfront
costs.
o However, increased microfinance loans and other financing options paired
with decreasing technological costs are making solar more economically
palatable even for developing countries
--Lack of awareness
- Although solar technology has existed for many decades, it is still only recently
becoming a popular, widely known energy source in places like Cambodia.
o However, the work of organizations such as PicoSol is actively combating this
deficiency in well-informed citizens
--Lack of trust
- Many Cambodians have had negative experiences with solar as a result of
unsustainable development practices, such as the World Bank’s “dumping” of solar
kits in 2012, that make people think it is unreliable.
o However, solar companies such as NRG Solutions are working to improve the
reputation of solar by providing quality products and reliable aftercare service.
--Bureaucratic political structure
- Rather than design policy such that the private sector allows market forces to produce
a public good, Cambodia’s government has been characterized by corruption and
favoritism, which greatly hinder the ability of the free market to act effectively and
equitably. Additionally EdC consolidation of private sectors impairs foreign
investment and energy entrepreneurship
o However, there has been growing political pressure against the bureaucratic
nature of Hun Sen’s RGC as evidenced by the closeness of the most recent
election. Additionally a new, young Minister of Environment, Sam Say Al, is
evidence of RGC’s awareness of the changing times.
Beyond the present challenges that threaten the growth of solar in Cambodia, there are a
number of situational advantages that offer Cambodian solar energy tremendous optimism,
given that appropriate policy is in place.
As stated earlier, some may view the still-developing nature of Cambodia’s economy as a
detriment, when–in fact, as it relates to solar–the current conditions in Cambodia are actually
quite favorable. The lack of grid infrastructure, while now considered a great hindrance to the

7. expansion of business around the country, may prove to be a blessing in disguise. To use the
popular analogy of distributed solar in comparison to mobile phones, Cambodia can bypass
the process of laying more “landlines” in the form of grid expansion and focus instead on
integrating distributed solar systems into utility scale mini-grids.
The timing of Cambodia’s current economic growth also caters nicely to the growth of solar,
as worldwide innovation in past decades has produced advanced technology that is much
better and more affordable than it was for more developed countries 10-20 years ago.
Additionally Cambodia can benefit by learning from the experiences of other countries that
have already grown their solar and other renewable energy industries, and again, they will be
able to bypass years of costly mistakes made by other governments who came before.
3. Policy Goals for NRG Solutions
NRG Solutions has already identified a number of steps that can be taken by the RGC, which
would stimulate growth in the solar sector:
• Removing import duties on solar system components (panels, charge controllers and batteries).
• Setting up clear and simple process for allowing solar systems to feed into the grid on a net-
metering system – not even for FiT.
• Increasing the number of permits available to distribute power at the village level.
 After speaking with a representative at REF, they confirmed that they are at 400 rural
electrification permits issued and that number will decrease as the grid expands
• Working with industry and the education sector to increase local capacity – renewable
energy engineers and technicians.
 Potential for collaboration with Royal University of Phnom Penh (RUPP) and Professor
Cheung Oeurn; increase Cambodian internship program (both in Phnom Penh and
Kampong Thom)
• Providing open and up-to-date information on grid infrastructure developments, which would
allow companies to make informed decisions on where is best to operate.
 Open and honest dialogue between the public and private sector is paramount for
businesses to feel comfortable investing resources in Cambodia
While all of the aforementioned policy changes would certainly aid private electricity providers
and social enterprises like NRG Solutions, it is not likely that any of these changes would be
made without a unified, targeted approach alongside other solar providers that also stood to gain
from a stable regulatory environment.

8. 4. Recommendations
As NRG Solutions continues to carry out its vision of empowering Cambodians with the clean
energy of the sun, it must take into account the current policy climate of Cambodia with regard
to solar energy. While there is a great deal of promise with respect to the potential of the solar
industry to grow in Cambodia, there is also the stark reality that such potential cannot be realized
without the support of the Royal Government of Cambodia.
Although it can be difficult to promote one’s policy agenda in any national government, there are
actionable steps that can be taken by NRG to ensure a more effective, equitable implementation.
 Work with coalition forces to promote common goals shared across the solar sector6
 Work to increase awareness within RGC by finding practical ways for educating
policymakers about the widespread benefits of solar in addition to providing them with
up-to-date information on costs and new technologies
 Develop a clear set of ambitious but attainable policy goals with realistic timelines.
o For example:
a. Grid Connectivity (2-3 years)
b. Net-metering (5 years)
c. Feed-in Tariff (10-20 years)
 The timeline for achieving goals of grid connectivity and net-metering for private
solar installations depends greatly on the decisions of the EDC to consolidate the energy
sector further or not. Reminding the RGC of their commitment to an open energy market
and promoting solar as a way to ease pressure on the national grid demand can be
effective lobbying techniques.
 Establish a scheduled policy review every 1-2 years to assess the current state of policy,
how NRG Solutions is being affected, and how the current private-public relationship can
provide greater mutual benefits for NRG, the RGC, and the people of Cambodia.
6 Here I would have included information from Romina de Jong about the work of SEAC.