According to the statistics from the Ministry of Industry and Trade, as of June 18, 2018, 100 large-scale solar power projects had been included in provincial/national power master plans nationwide. Particularly, 750 rooftop solar PV projects with a total capacity of 11.55MW are under implementation. However, the Ministry also said, according to current regulations on encouraging the development of solar power projects, some obstacles still exist, including ones relating to grid connection process; or some regulations contradictory with tax regulations which relates to the trading of surplus electricity output generated from rooftop solar PV systems, etc.
Troubleshooting these problems, in the draft Decision, the development of grid-connected solar power projects is proposed in three ways: Development of grid-connected solar farm projects shall comply with power development master plans; grid-connected solar farm projects with capacity of over 50MWp, which are not included in power development master plans, must be appraised and submitted to the Prime Minister for approval and inclusion into power development master plans; the Ministry of Industry and Trade approves and includes into power development master plans solar power projects with capacity of less than or equal to 50MWp.
Removing grid connection related obstacles, the draft Decision clearly states that the electricity seller is responsible for investment, operation and maintenance of power lines and step-up substations (if any) from the seller's power plant to the connection point with the buyer's power grid.
The connection point is agreed upon by the seller and the buyer on the principle that the connection point should be closest to the existing power grid of the buyer, securing the transmission of capacity of the seller's power plant, in conformity with the approved power development master plan. In case the connection point is different from the measuring device installation location, the seller will bear power losses on the connection line and of the step-up transformer of the plant.
Attractive feed-in tariff scheme
Especially, to motivate investment in solar power projects to meet the electricity demand for daily life and production activities, at the draft Decision, the Ministry of Industry and Trade keeps on proposing a feed-in tariff scheme for solar power projects during the period from July 1, 2019 to June 30, 2020.
Specifically, feed-in tariffs for floating, ground mounted and rooftop solar PV projects (in forms of electricity selling households or electricity consuming households) in zone 1 are from UScent 9.18 - 9.85/kWh (equivalent to VND 2,095 - 2,448/kWh); those in zone II from UScent 7.89 to 8.47/kWh (equivalent to VND 1,802 - 1,933/kWh; and in zone III from UScent 6.94 to 8.99/kWh (equivalent to VND 1,697 - 2,052/kWh). This FIT schedule will be adjusted gradually downwards in the period from July 1, 2020 to June 30, 2021.
With the proposed feed-in tariff scheme, Mr. Tran Viet Ngai, Chairman of the Vietnam Energy Association, said that this tariff schedule would highly encourage investors, because compared to many countries in the world it is an attractive feed-in tariff schedule. In developed countries, the average FIT is about UScent 5 - 7/kWh, etc. Further development of incentives for investment in solar energy projects is necessary in the context of fossil fuels or hydropower sources running out.
As schedules, the Decision on incentives for developing solar energy projects in Vietnam will come into effect from July 1, 2019. Previously in 2017, in order to encourage the development of solar energy projects in Vietnam, the Prime Minister issued Decision No. 11/2017/QD-TTg on incentives for developing solar energy projects in Vietnam, including incentives relating to capital, tax, land use as well as feed-in tariff (UScents 9.35/kWh). It is this mechanism that has created a "wave" of investment in solar power projects in recent years.