German-Vietnamese City Partnership – A Solar PV System for Hoi An

In 2013 the two cities of Wernigerode and Hoi An signed a city partnership, comprised in part of shared common climate change efforts. Hoi An participates in the Municipal Climate Partnership project implemented by Engagement Global gGmbH in cooperation with further initiatives and communal associations, funded by the German Ministry for Economic Cooperation and Development (BMZ). The two cities are developing a work agenda for the coming years.


In the context of this partnership, the city of Wernigerode has now acquired funding for a solar PV system to be installed on the roof of the city department for culture and sports, right at the entrance to the UNESCO World Heritage old city center.

From October 19 to 21 a delegation from the city of Wernigerode visited Hoi An and signed the cooperation contract for the PV system. With an estimated capacity of 38 kWp, the system is expected to support the electricity demand of the center of culture and sports as well as power the public lantern and sound system of the historic city center. To guarantee these consumers continued solar energy supply in the evenings, a certain amount of battery storage capacity will be integrated to the system design.


During the visit, a solar installer from Wernigerode, along with representatives from the German city’s communal utility, had the chance to examine the available roof areas, electrical facilities and grid connecting points.

RB – Renewable Energy Consulting advised the two parties regarding feasible system designs, accompanied the delegation on their inspections and mutual exchanges, and presented information on solar energy development and framework conditions in Vietnam and Germany.

The installation of the PV system is planned for mid-2017. For more information see here (in German).

New Study: Commercial PV Rooftop Investment Opportunities in Vietnam

Vietnam has abundant solar resources. The country’s solar irradiation is comparable to most countries in the region, including developed solar markets such as China, Thailand or the Philippines, as well as to international solar markets, such as Spain and Italy. solar_map_vnCurrent scientific estimates state an average of 4-5 kWh/m2/day in most regions of Southern, Central and even some parts of Northern Vietnam (totalling up to 1,460-1,825 kWh/m2/year) and average peak irradiation levels of up to 5.5 kWh/m2/day in some Southern regions (totalling up to 2,000 kWh/m2/year).

Deploying this substantial solar potential at production sites would help manufacturing industries in Vietnam improve power supply reliability and reduce the burden on national power demand. This would also help the industrial sector reduce their significant expenses on electricity consumption due to high tariffs during peak hours and cross-subsidization policy from large consumers to smaller ones.

And looking at it from the perspective of  the solar industry: the long-term market potentials for Solar PV investments in the commercial and industrial sector are generally vast. All economic indicators show that the Vietnamese economy will most likely continue to grow at a rate of 5-6% per year and foreign direct investments (FDI) are expected to increase likewise. Vietnam’s high level of regional and international economic integration is widely seen as a guarantor for further economic growth and the development of the Vietnamese commercial and industrial sector in particular.

To make solar PV investment opportunities in the Vietnamese commercial sector tangible, the German-funded Renewable Energy (RE) Project Development Programme (PDP) assigned RB Renewable Energy Consulting to provide an analysis on solar PV investment opportunities in Vietnam, including six detailed investment case studies for commercial and industrial PV rooftop systems.


The main objective of the assessment was to identify the potential for rooftop solar PV applications in companies and factories within industrial zones and recommend business opportunities for German companies. The geographical focus of the study was industrial zones and/or private factories located in Central or South of Vietnam with the highest solar energy potential. The core of the analysis is defined by six case studies, with the character of pre-feasibility studies. In general, two different business models were applied in the calculations of costs and benefits: self-consumption and net-metering, which are both expected to be included in the future solar PV support framework drafted by the Vietnamese Government in 2015/2016.

The case studies indicate that the emerging solar market of Vietnam already offers attractive business opportunities for German and Vietnamese companies. The key results of the assessment can be summarized as following:

  • The pre-feasibility studies for the six commercial and industrial cases that have been developed in the course of this study show that there are attractive investment opportunities for rooftop solar PV in the Vietnamese industry sector. However, they also show that the current low level of electricity tariffs in Vietnam is a big challenge and the assumption of a future increase in retail power tariffs is a critical factor for investment calculations.
  • For the whole examined company sample, equity IRRs (before tax) range from 5% to almost 18% in conservative base scenarios and from 8% to 21% in the more optimistic scenarios with lower investment costs assumed. Equity payback times range from 9 to almost 18 years in the base scenarios and from roughly 7.5 to 14 years in the more optimistic scenarios and can even get below 7 years when low investment costs and a higher increase of power tariffs are assumed.
  • The results show that there is a divide in results between business sectors that pay the ‘business’ and the ‘manufacturing’ electricity tariffs of EVN. Equity IRRs (before tax) reach double-digit values even in base case scenarios, in those cases that are either paying the EVN-Business tariff or the EVN-Manufacturing tariff but are able to benefit from the net metering support mechanism. In those cases, equity payback times are below or close to 10 years in the base cases.
  • The results also show that the a net metering support scheme as foreseen in the first draft legislation from 2015/2016 would have the potential to improve investment cases substantially for those PV system designs that allow for excess energy generation. This, however, will apply only to a very small number of cases, and hence shows that the legal framework for rooftop applications as proposed would have had only limited impact on the rapid development of this market segment. In the short- and medium-term the key driver for PV investments will thus remain self-consumption and the benefits of power purchase savings.
  • The analysis also revealed that despite the general expectation of investors to reach short equity payback times, there also is an added-value perception of solar PV investments that make longer payback times feasible for many investors. These added values range from benefits for green building certification to contributions to corporate programs, greening products or services in the eyes of customer target groups or the increase of energy supply security.

The study was released in the context of  the one-day conference Photovoltaics in Vietnam: Free-Field and Net Metering before Breakthrough on September 12th 2016, organized and supported by the Energy Solutions – Made in Germany initiative of the German Federal Ministry for Economic Affairs and Energy (BMWi), the Delegate of German Industry and Commerce in Viet Nam (AHK Viet Nam) and the GIZ Energy Support Programme Vietnam. Read more about the conference here.

The study is available for download at the website of the German Ministry for Economics and Energy. Or you can download it directly here.


The Renewable Energy (RE) Project Development Programme (PDP) is implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Affairs and Energy (BMWi) in the context of the Energy Solutions – Made in Germany initiative. The target countries in the Southeast Asia (SEA) region are Myanmar, Philippines, Thailand, and Vietnam. PDP SEA aims to develop Southeast Asian renewable energy markets by promoting German- Southeast Asian business partnerships. It supports Germany’s small and medium sized renewable energy business enterprises in their activities in the region

German Solar Industry Conference in Vietnam – New Investment Opportunities

In September 2016, the GIZ Energy Support Programme Vietnam, together with the German Delegate of Industry and Commerce (AHK) organized a business trip for a German solar industry delegation to Ho Chi Minh City to build up German-Vietnamese networks as well as boost investments and project implementation in the sector.


Starting with the one-day Photovoltaics in Vietnam: Free-Field and Net Metering before Breakthrough conference on September 12th, the German solar companies presented their products and services to over 200 participants from industry as well as federal and provincial political administrations. Representatives from local Vietnamese companies (Viet Linh, SolarBK etc.) also shared insights into the local solar sector. Private sector representatives from both countries concluded that the three requirements to foster solar power development in Vietnam are: a suitable FiT and supporting legal-administrational framework, project financing at affordable interest rates, and public acceptance and support.


The conference released a newly conducted assessment of investment opportunities in Vietnam presenting six detailed rooftop solar PV case studies. The results indicate that the emerging solar market of Vietnam offers attractive business opportunities for German solar companies. Peter Cattelaens, Deputy Programme Director of the GIZ Energy Support Programme in Vietnam, summarized: “German companies in the solar PV sector can now seize a number of attractive business opportunities along the value chain. Project developers, sales and operation managers, suppliers, engineers and planning consultants will be required in the very close future to invigorate the growth of the Vietnamese solar PV market.”


A site visit to the DBW Garment Factory, one of the latest commercial PV rooftop projects and a best-practice example of German solar PV technology in Vietnam, rounded up the week.

Read more about the conference and German-Vietnamese investment cooperation in the solar sector in the October edition of Vietnam Investment Review (download pdf) or on Vietnam Economic News (14/09/2016).