Solar Energy Investment in Cambodia: Opportunities, Risks & ROI (2025 Guide)

Cambodia is on the cusp of a renewable energy revolution—and solar power is leading the charge. With rising electricity demand, abundant sunshine, and strong government support, solar energy presents a compelling opportunity for foreign and local investors alike.

In this comprehensive guide, we’ll explore the opportunities, risks, and return on investment (ROI) of solar energy in Cambodia. Whether you’re a developer, investor, or policymaker, this article will help you understand the landscape and how Adaeng Development Co., Ltd. can help you navigate it.

Cambodia’s Energy Needs and Sustainability Goals

Cambodia’s electricity demand has grown by over 15% annually in the past decade, driven by industrialization, urbanization, and rural electrification. Yet, the country still relies heavily on imported electricity and fossil fuels.

To address this, the Royal Government of Cambodia has set ambitious goals:

Achieve 70% renewable energy share by 2040
Expand rural electrification to 100% by 2030
Reduce greenhouse gas emissions under the Paris Agreement

Solar energy is central to these goals, offering a clean, scalable, and cost-effective solution.

Why Solar?

☀️ Climate Advantage

Cambodia enjoys 5.0–5.5 kWh/m²/day of solar irradiance year-round, making it one of Southeast Asia’s most solar-rich countries.

💰 Cost Competitiveness

The cost of solar photovoltaic (PV) systems has dropped by over 80% in the last decade. In Cambodia, utility-scale solar can now be developed for under $0.06/kWh, making it cheaper than diesel or coal.

🏛️ Government Support

The Ministry of Mines and Energy (MIME) and Electricité du Cambodge (EDC) have launched multiple solar tenders and pilot projects. The government is also working with development partners like the Asian Development Bank (ADB) and USAID to expand solar access.

Market Overview

⚡ Current Capacity

As of 2025, Cambodia has over 400 MW of installed solar capacity, up from just 10 MW in 2016. Key projects include:

National Solar Park (100 MW) in Kampong Chhnang
Bavet Solar Project (60 MW) near the Vietnam border
Multiple rooftop solar installations in Phnom Penh and SEZs

🏭 Major Players

Schneider Electric – Commercial rooftop systems
TotalEnergies – Industrial solar leasing
Cleantech Solar – PPA-based installations for factories
Sunseap Group – Utility-scale solar farms

🏘️ Rural Electrification Demand

Over 2 million Cambodians still lack reliable electricity. Solar mini-grids and off-grid systems are vital for powering remote villages, schools, and clinics.

Investment Models

1. Independent Power Producer (IPP)

IPP developers build and operate solar farms, selling electricity to EDC under long-term Power Purchase Agreements (PPAs).

Pros: Stable revenue, government-backed contracts
Cons: Competitive bidding, regulatory complexity

2. Rooftop Solar for Commercial Use

Factories, malls, and hotels install solar panels to reduce grid dependency and cut costs.

Pros: Quick ROI, energy savings, green branding
Cons: Roof space limitations, upfront capital

3. Solar Leasing & PPA Agreements

Third-party providers install and maintain systems, and clients pay only for the electricity used.

Pros: No upfront cost for end-users
Cons: Requires long-term contracts and creditworthy clients

Adaeng Development can help structure these models, identify partners, and secure permits.

Legal and Regulatory Framework

📜 Licensing Requirements

Solar projects must be licensed by MIME and registered with EDC. Requirements vary by project size and type:

<1 MW: Simplified process
>1 MW: Full feasibility study, environmental impact assessment, and PPA negotiation

🏛️ Role of EDC and MIME

EDC: Purchases electricity from IPPs, manages grid integration
MIME: Issues licenses, sets policy, and oversees compliance

Cambodia is also developing a National Energy Efficiency Policy and Renewable Energy Master Plan, which will further streamline solar investment.

Challenges and Risks

⚡ Grid Limitations

Cambodia’s grid is still underdeveloped in rural areas. Integrating intermittent solar power requires upgrades in transmission and storage.

🌍 Land Acquisition

Securing land for solar farms can be complex due to unclear titles, zoning issues, and community concerns. Adaeng Development offers land sourcing and due diligence services to mitigate this risk.

💱 Currency and Political Risk

PPAs are often denominated in USD, but local currency fluctuations and political changes can affect returns. Diversifying revenue streams and working with experienced local partners is key.

Case Studies

✅ National Solar Park (Kampong Chhnang)

Developed with ADB support
100 MW capacity
PPA awarded at $0.03877/kWh, one of the lowest in ASEAN

✅ Cleantech Solar – Phnom Penh SEZ

1.5 MW rooftop system
Supplies power to garment factories
Reduced electricity bills by 25%

✅ Okra Solar – Off-Grid Villages

Modular solar + battery kits
Powers homes and small businesses in rural provinces
Backed by USAID and private investors

ROI Expectations

💸 Cost per MW

Utility-scale: $700,000–$900,000 per MW
Rooftop: $800–$1,200 per kW

⏳ Payback Period

Rooftop solar: 3–5 years
Utility-scale: 6–8 years

🎁 Incentives

Import duty exemptions on solar equipment
VAT exemptions for QIP-registered projects
Potential carbon credit revenue

Adaeng Development can help you model ROI, secure incentives, and connect with financing partners.

Conclusion: Why Now Is the Time to Invest in Solar

Cambodia’s solar sector is no longer a niche—it’s a national priority. With falling costs, rising demand, and strong policy support, solar energy offers high-impact, high-return opportunities for investors who act now.

Whether you’re building a solar farm, installing rooftop panels, or launching a rural electrification project, Adaeng Development Co., Ltd. is your gateway to success. We offer:

Market research and feasibility studies
Land acquisition and permitting
Legal structuring and PPA negotiation
Project development and investor matchmaking

Ready to power Cambodia’s future—and your portfolio? Contact us today to schedule a consultation.