Accelerating distributed generation across several Asian markets has driven a downward revision to its on-grid electricity demand forecasts, as more supportive rooftop solar policy and persistently high retail tariffs erode grid-based consumption, BMI Country Risk and Industry Research said in its recent report.
“We have revised our Asia net electricity consumption forecast over the next decade by 2.6 percent lower, from 22,930.1TWh to 22,331.0TWh in 2035,
“This reflects the compounding effect of growing behind-the-meter and rooftop solar generation, which reduces demand on the grid,” the research house said.
According to the report, several markets have strengthened distributed generation frameworks recently.
For instance, in Thailand, the introduction of the ‘Quick Big Win’ energy package, announced in late 2025, introduced expanded community solar schemes and tax deductions for rooftop solar installations.
Indonesia, meanwhile, has set a 485MW rooftop solar quota for 2026 and launched a 100GW mini grid initiative targeting electrification across its remote islands, which BMI expects to further erode grid demand over the next two years.
Vietnam is another notable market seeing decentralized solar reduce on-grid demand.
Despite strong gross domestic product (GDP) growth of about 8 percent in 2025, power consumption only grew by 4.9 percent year on year, with about 10TWh of commercial and industrial (C&I) power demand reportedly self-generated.
In addition, the government’s decision in January 2026 to raise its rooftop solar export cap from 20 percent to 50 percent of installed capacity will accelerate this shift.
The previous cap had constrained the economics of larger installations, as excess generation beyond self-consumption was largely curtailed.
The revised threshold will allow prosumers to sell a greater share of surplus power to the grid, improving project returns particularly in the industrial and commercial segments, said BMI.
Meanwhile, the research house’s non-hydropower renewables growth outlook has improved, driven by methodological updates capturing behind-the-meter solar and strengthened energy security imperatives following the US-Iran war.
“Our 2035 solar capacity forecast has been revised 3.9 percent higher to 3,740.5GW, and our wind capacity forecast 11.6 percent higher to 1,629.8GW,
“The solar revision is partly methodological, as we have updated our approach to capture behind-the-meter installations not reflected in official grid-connected capacity statistics,” it said.
In addition, it noted the Strait of Hormuz disruption and resulting energy price volatility have accelerated renewables deployment timelines across the region.
Across Asia’s gas-importing markets, the sudden tightening of liquefied natural gas (LNG) supply has reinforced the economic and strategic case for domestic renewables deployment.
It is noted that Japan, South Korea, and several Southeast Asian importers have each signaled accelerated renewable procurement timelines in recent weeks.
The Philippines declared a state of national energy emergency on March 24 2026 for one year, and on March 26 2026 suspended the Wholesale Electricity Spot Market (WESM) until further notice after spot prices jumped 58 percent in March.
The government has since committed to fast-tracking 1.3GW of solar capacity to reduce the market’s dependence on imported fossil fuels.
“While many of these commitments have yet to be formalized into
binding policy, the directional shift is clear and underpins our upward revision to regional capacity forecasts,” said BMI.
Meanwhile, a weaker thermal generation outlook reflects tightening LNG supply following the US-Iran war and robust renewables expansion, compounding the structural shift away from fossil fuels in the region’s power mix, according to the report.
“We have revised our 2035 coal generation forecast 4.3 percent lower to 8,657.4TWh and our gas generation forecast 8 percent lower to 2,203.5TWh,
“The gas revision is most directly tied to the Ras Laffan disruption: damage to the liquefaction complex during the US-Iran conflict took an estimated 12.8 million tons per annum (mtpa) of capacity offline, equivalent to approximately 17 percent of the facility’s pre-conflict export capacity,” said BMI.
BMI’s oil and gas team expects repair timelines to extend to three to five years, and forecasts Qatar’s LNG exports to decline 20.2 percent to 83mtpa in 2026, from 104 mtpa in 2025.
“The supply shortfall has had immediate consequences for Asia’s gas-dependent power sectors,” it said.
According to BMI, tighter LNG availability has eroded gas-to-power economics across the region, leading to weaker investor and developer appetite.
It is noted that in March 2026, Vingroup proposed to scrap an LNG-to-power project in Vietnam in favor of renewables and battery storage, explicitly citing the deterioration in LNG economics following higher prices.
Elevated spot gas prices have similarly pressured generation margins in liberalized markets including Japan, Singapore, and the Philippines.
“The coal generation revision, while smaller in percentage terms, is driven by different dynamics. The downward revision reflects the continued displacement of coal by renewables,
“Our revised forecast shows coal generation growing just 2.7 percent over the decade to 2035, representing a material shift from our prior outlook of continued growth throughout the forecast period,” said BMI.
APAC’s crisis response positions renewables at the core of energy security – BMI