Solar Energy for Restaurants: How to Reduce Electricity Costs

The restaurant industry is one of the most energy-intensive sectors in the service economy. A typical full-service restaurant consumes on average three times more energy per square meter than other commercial buildings. A study of six restaurants in Bangkok showed annual consumption ranging from 47,000 to 226,000 kWh, while a typical villa in Phuket requires only 10-12.

Compared to other countries in Southeast Asia electricity tariffs in Thailand are relatively high: commercial consumers pay 4.086 THB/kWh. In addition, the hot and humid tropical climate requires significant spending on air conditioning. Cooling and humidity control account for over half of the total energy consumption of commercial buildings in the region. Reducing these costs directly impacts OPEX. As a result, restaurant owners are increasingly turning to solar energy as a tool to improve business profitability.

Let’s analyze the structure of restaurant energy consumption, compare it with the solar generation profile, and estimate how installing a rooftop solar system can reduce electricity bills.

How Restaurants Consume Electricity

Restaurant energy consumption depends on the type of establishment (full-service, fast food, or café), floor area, and kitchen load. However, several general patterns can be identified.

In the US and Europe, the main electricity consumer is typically the kitchen, accounting for 25-45% of total consumption. Refrigeration uses 20-30%, water heating for 15-25%, HVAC for 10-20%, and lighting for 5-10%.

In tropical climate, the structure differs significantly: air conditioning can account for up to half of total consumption. Approximate ranges are shown below.

Energy Consumption Structure of a Restaurant in Tropical Climate

For example, an energy audit of a fast-food restaurant in Malaysia showed the following breakdown:

• Air conditioning – 42%
• Kitchen – 25%
• Other equipment – 22%
• Lighting – 11%

Why Does Air Conditioning Dominate?

Cooling and humidity control

In tropical climate, air conditioning is used not only to reduce temperature but also to remove moisture. This increases energy consumption compared to dry climate.

Continuous operation

Unlike kitchen loads, which are short-term peaks, HVAC operates throughout the day: before opening (preparing the dining area), during service hours, and often after closing.

Cooling losses

Frequent door opening, semi-open or open layouts, and constant inflow of warm humid air force compressors to operate continuously.

* * *

With that being said, the kitchen and refrigeration still account for a significant share of consumption. Therefore, although HVAC is the largest consumer, it is still lower than in other commercial buildings. For example, in Thai hotels, air conditioning can exceed 60% of total consumption.

Load Profile: Day and Evening

Energy demand throughout the day is uneven. Most restaurants operate during the day and evening. Morning consumption is relatively low and mainly related to preparation. The first peak occurs at lunchtime (10:00–14:00): kitchen equipment, exhaust systems, and air conditioning operate at full capacity. After a slight decrease in the afternoon, a second peak follows in the evening (17:00-21:00) during dinner service. However, it is usually lower than the lunch peak. At night, the restaurant’s demand drops to a base load, mainly refrigerators, freezers, ventilation, and minimal lighting.

An important factor for solar calculations is the share of daytime consumption. Around 60% of a restaurant’s energy is used during daylight hours, and up to 70% for venues focused on brunch and lunch. Evening and night loads account for the remaining 30-40%. These proportions help estimate the potential share of solar self-consumption.

Solar Generation: Potential and Alignment with Load

Thailand has about 2,060 peak sun hours per year. Annual solar generation ranges from 1,300 to 1500 kWh per kW of installed capacity.

The cost of rooftop systems in the country is 25-35 THB per watt depending on system size – the larger the system, the lower the cost per watt.

Krungsri provides the following example: a 10 kW installation (500,000 THB) can save 75,000-100,000 THB per year, with a payback period of 5-8 years, while a 100 kW system (3.3 million THB) pays back in 3-5 years. In addition to scale effect, this variation is explained by higher self-consumption rates in larger projects.

Solar generation peaks at midday – exactly when restaurants experience their lunch peak. This allows a significant portion of the generated energy to be used on-site, reducing electricity purchases from the grid. However, the evening peak is almost entirely covered by the grid, as generation declines toward 18:00. It makes maximizing self-consumption economically preferable.

What Share of Consumption Can Be Covered by Solar

When estimating self-consumption, it is important to consider daytime load,  system capacity, roof configuration, and operating schedule. Below are indicative ranges for medium-sized restaurants (200-300 m²) assuming no battery storage and a net billing model:

Share of daytime consumption. If a restaurant operates from breakfast through early evening, 60-70% of annual energy use occurs during daylight hours. This is the portion that can be covered by solar generation.

Self-consumption ratio. With proper system sizing, self-consumption can reach 60-80% of generated energy. The value depends on how well generation matches load: the higher the daytime demand, the higher the self-consumption.

Share of solar in total consumption. For a restaurant consuming 70,000 kWh per year, a 15 kW system (producing about 21,000 kWh per year) can cover 20-30% of total consumption. Increasing system size increases coverage but also leads to more surplus energy sold to the grid at a lower price.

Even with a large solar system, a restaurant will still need to buy electricity in the evening and at night. Simply adding more panels does not deliver proportional savings, because excess daytime generation does not match actual consumption.

That is why a system should not be sized “to the maximum,” but based on precise calculations that align real load profiles with generation patterns.

In this context, batteries are not just an add-on, but a balancing tool. They allow some of the daytime solar energy to be used later in the evening. However, their use must make economic sense, based on the cost per kWh delivered through the battery and the specific operating profile of the site.

In the end, the optimal system is defined not only by panel capacity, but by how well generation, consumption, and battery operation are synchronized.

Example Calculation for a Typical Restaurant

Consider a mid-sized restaurant with an area of 300 m² in Phuket, operating from 10:00 to 22:00 and consuming 70,000 kWh per year (192 kWh per day). Assume that daytime load (10:00–17:00) accounts for 60% (115 kWh per day), and evening load is the remaining 40% (77 kWh per day). A 25 kW solar system is installed on-site. The input data are shown below:

Generation and Savings Calculation

Annual generation

A 25 kW system, with an average yield of 1,400 kWh per kW, produces about 35,000 kWh per year.

Self-consumption

The restaurant uses roughly 60% of its electricity during the day, or about 42,000 kWh per year. Since the solar system generates less than the daytime demand, all of the energy is used on site. Nothing is wasted. In practice, self-consumption is close to 100% of generation, or 35,000 kWh per year.

Grid offset

Before installing solar, the restaurant purchased 70,000 kWh per year. After installation, 35,000 kWh is covered by solar, and the remaining 35,000 kWh is still purchased from the grid.

Annual savings

Savings come from reducing the amount of electricity that needs to be bought: 35,000 × 4.7 = 164,500 baht per year

Payback period

The annual electricity bill without solar is: 70,000 × 4.7 = 329,000 baht. After installation, costs are reduced by about 50%. With a system cost of around 625,000 baht, the payback period is: 625,000 / 164,500 ≈ 3.8 years.

Conclusion

A 25 kW system is a good fit for this type of restaurant. It produces little to no excess energy, and almost all of it is used. This leads to strong savings and a relatively fast payback. If the system is larger, some energy may start to go unused. If it is smaller, the savings will be lower. This makes 25 kW close to an optimal system size for this scenario.

How This Changes the Cost Structure

A solar installation does not replace grid electricity for a restaurant. It shifts when and how energy costs are incurred.

Before installing solar, the restaurant pays for all its electricity at the retail tariff. After installation, part of the daytime demand is covered by on-site generation. This mainly includes air conditioning, refrigeration, and part of the kitchen load during preparation hours and lunchtime.

A 25 kW system can cover up to 100% of daytime annual consumption and reduce total electricity costs by around 50%. This is because solar generation aligns with the restaurant’s busiest hours, when energy use is at its highest.

In practical terms, this means:

· The higher the daytime load, the greater the share of useful solar generation

· The lower the excess generation, the better the system economics

· Evening consumption remains dependent on the grid

Limitations and Risk

· Incomplete load coverage. Solar generation does not solve the evening peak. Without energy storage, the restaurant will still rely on grid electricity after sunset.

· Roof space constraints. A 25 kW system typically requires around 110–140 m² of available roof area. Restaurants with smaller roofs may not have enough space to install sufficient capacity.

· Upfront costs and maintenance. An investment of 300,000 to 600,000 baht is significant for a small business. In addition, the system requires regular maintenance and periodic servicing.

· Dependence on operating hours. The later a restaurant opens and the more revenue is generated in the evening, the lower the share of daytime consumption and, therefore, the lower the benefit from solar generation.

Conclusion

For restaurants in Thailand, electricity is a major operating expense. Most of the demand comes from kitchens, refrigeration, and air conditioning, and it is unevenly distributed throughout the day, with peaks during both daytime and evening hours.

Rooftop solar systems fit naturally into this pattern, as they generate electricity during the day. However, their effectiveness depends less on installed capacity and more on how closely generation matches the actual consumption profile.

On-grid systems without batteries typically peak at midday. By orienting part of the array to the west, some of that generation can be shifted toward the late afternoon and early evening, better aligning with restaurant operations. This does not increase total output, but it makes the energy more valuable from an economic standpoint.

In most real-world scenarios, excess electricity is not monetized and is effectively lost. As a result, oversizing a system without considering the load profile can reduce investment efficiency and extend the payback period.

A well-designed system, tailored to actual consumption patterns, can cover a significant share of daytime demand and, in typical cases, offset around 30–50% of annual electricity use without the need for batteries.

Larger systems begin to make more sense when combined with battery storage. In that case, excess energy can be shifted into the evening hours instead of being wasted. While this increases the upfront cost and may extend payback, it also provides clear benefits: protection against outages and reduced peak demand, which in some tariffs is the most expensive part of the bill.

Ultimately, the key to performance is not system size alone, but how well generation, consumption, and system operation are aligned.

‍