The Ministry of Mines and Energy ("MoME") has issued a notification on the temporary suspension of new applications for permits for companies wishing to provide rooftop solar installation services to electricity consumers in Cambodia.
Key Points
The MoMEannounced that it will temporarily suspend the acceptance of new permit applications from companies seeking to provide rooftop solar installation services. The suspension takes effect from the date of the notification and will remain in place until further notice.
Specifically:
- To date, the MoME has granted permits to 68 companies providing rooftop solar installation services. Of these, 58 companies have obtained the required licenses from the Electricity Authority of Cambodia ("EAC") and are authorized to operate in accordance with applicable regulations.
- Based on the MoME’s assessment of the current market conditions and demand for rooftop solar installation services, the MoME considers that the existing number of authorized service providers is sufficient to meet market needs.
- The temporary suspension is intended to provide the MoME with time to monitor and evaluate the performance of existing service providers and reassess the actual demand for such services.
- Existing licensed companies must carry out installation services directly and must not transfer, subcontract, or delegate their responsibilities to unauthorized companies or individuals.
- Licensed companies are also prohibited from providing misleading information or encouraging customers to install systems beyond their actual requirements.
- The MoME, EAC, and Electricité du Cambodge ("EDC") will jointly conduct monitoring, inspections, and evaluations of licensed service providers, as necessary.
- Companies that fail to comply with licensing conditions, technical standards, and applicable regulations may be subject to license suspension, license revocation, and other legal measures.
Temporary Suspension of New Applications for Rooftop Solar Installation Service Permits
KPMG Commentary
This notification reflects the MoME's intention to strengthen oversight of Cambodia's rooftop solar installation sector and ensure that authorized service providers maintain service quality and regulatory compliance. Rather than expanding the pool of service providers, the authorities are focusing on evaluating the performance of existing permit holders and assessing actual market demand.
Businesses planning to enter the rooftop solar installation market should note that applications for new permits are currently suspended and should closely monitor future announcements from the MoME regarding the resumption of the application process. Existing permit holders should review their operational arrangements to ensure that installation works are performed directly by authorized entities and that they remain compliant with all applicable licensing requirements, technical standards, and regulatory obligations.
It is noteworthy that the notification does not expressly state any restriction on the acquisition of an existing entity that already holds a rooftop solar installation permit. The suspension appears to apply to the issuance of new permits and the acceptance of new permit applications. Nevertheless, businesses considering such acquisitions should carefully assess applicable regulatory requirements and any approval, notification, or compliance obligations that may arise from a change in ownership or control of a licensed entity.
Consumers should ensure that any rooftop solar installation is undertaken by a duly licensed provider and that the proposed system size and technical specifications are appropriate for their actual electricity consumption needs.
KPMG can assist businesses in understanding the regulatory requirements applicable to rooftop solar installation projects, assessing compliance with licensing obligations, and addressing regulatory matters relating to rooftop solar systems and ongoing operational compliance. KPMG can also provide broader regulatory and compliance advisory services across the solar energy sector, including licensing, investment, project development, operational matters, merger and acquisition (M&A) transactions, legal and regulatory due diligence, transaction structuring, and regulatory considerations relating to the acquisition, restructuring, or transfer of ownership of licensed solar businesses.