Support Mechanism for Solar Energy in Vietnam officially issued

Today, April 14, 2017 the long-awaited decision on the “Support Mechanism for the Development of Solar Energy in Viet Nam” was finally published. The Prime Minister of Vietnam officially signed Decision 11/2017/QD-TTg a few days earlier, on April 11.

Ground-mounted PV power plants:

  • With this decision Vietnam introduces – for the first time – a feed-in tariff for grid-connected PV power plants of 2,086 VND, equalling 9.35UScents/kWh (20 year PPA). The tariff will be adjusted regularly to changing VND-USD exchange rates.
  • The government will issue a Standard PPA that all power sales have to comply with.
  • The electricity buyer (single-buyer is Electricity of Vietnam, EVN)  has to purchase the entire solar power generated from the PV system with priority given to deploy the full generating capacity of the system.
  • PV systems are eligible for the support if and when solar cell efficiency is >16% and module efficiency is >15%.

Rooftop systems:

  • Rooftop PV systems will be eligible for a net metering support scheme (using a bi-directional meter).
  • Excess energy within a billing period (not yet clarified) shall be transferred to the following billing period. Excess balances will be remunerated either after one year or when the PPA is terminated with the same tariff as ground-mounted systems (9.35USct/kWh). This tariff will be adjusted annually according to fluctuations in VND-USD exchange rates.
  • Implementing regulations with more detailed provisions for the net metering design will have to follow
  • The long discussed system capacity cap for rooftop systems is no longer to be found in the final law.

Further provisions:

  • Solar PV investors will be granted various land use fees as well as import duty and tax exemptions.
  • The Ministry of Finance (MoF) is asked to research on and develop additional tax exemptions and other supportive regulations for smaller rooftop systems <50kWp.
  • The regulation will enter into force with June 1st, 2017 and is initially limited until June 30, 2019. Until then, the Ministry of Industry and Trade (MoIT) will assess the law and suggest adjustments for a follow up regulation.
  • PV projects that have signed any PPAs before this decision entered into force are responsible to renegotiate and amend those agreements in accordance to the new legislation.

Find here the official Prime Minister Decision 11/2017 on the “Support Mechanism for the Development of Solar Energy in Viet Nam” for download (pdf, in Vietnamese).

Find here an unofficial english translation of the law for reference (provided by GIZ Energy Support Programme Vietnam).