New Decision on incentives for the development of solar power projects in Vietnam – Lexology

On 6 April 2020, the Prime Minister issued a new Decision (Decision 13/2020) to replace Decision 11 dated 11 April 2017 on incentives for the development of solar power projects in Vietnam (Decision 11/2017), which expired 10 months ago. Below are the summaries of certain key issues of this new Decision.

First step in opening up competitive power market

Decision 13/2020 no longer limit the power purchaser to only Vietnam Electricity (EVN) and its member units but extends to other organisations and individuals purchasing power from the power seller. This seems to enable the power sellers to sell directly to the end-user. However, it is unclear whether:

 both “grid-connected solar project” and “rooftop solar project”; or

 only “rooftop solar project”,

can sell power directly to other organisations and individuals since only the “rooftop solar project” has explicit provision that allows selling electricity generated from rooftop solar power systems to individuals and organisations other than EVN.

New General FiT Scheme and Special FiT 

Decision 13/2020 introduces new General FiT scheme based on the technology of solar power projects as follows:

Beside the above General FiT, Decision 13/2020 also provide a different FiT for gridconnected solar projects in Ninh Thuan only (Special FiT). Some grid-connected solar power projects in Ninh Thuan Province, as described below, will receive a higher FiT of UScent 9.35/kWh, regardless of the technology being used.

The above General FiT and Special FiT have not included value-added tax and fluctuations in currency exchange rates.

Except for projects in Ninh Thuan, it can be seen that the new FiT applicable to solar power projects under Decision 13/2020 is lower than the FiT under Decision 11/2017 (UScent9.35/kWh)

Applicability of new Feed-in Tariff (FiT) scheme

Under Decision 13/2020, the General FiT scheme applies to:

 Grid-connected solar power project (or a part thereof) that (i) has obtained a decision on investment policy by the competent authority before 23 November 2019; (ii) has the commercial operation date (COD) of the whole or a part of the project in the period from 1 July 2019 to 31 December 2020; and (iii) have solar cell efficiency of more than 16% or solar module efficiency of more than 15%; and

 Rooftop solar power projects that come into power-generating operation and have electricity meter readings confirmed in the period from 1 July 2019 to 31 December 2020. 

The Special FiT is only applicable to grid-connected solar power projects in Ninh Thuan Province that: 

 have been included in the power development plans;

 have the COD before 1 January 2021;

 have the total accumulated capacity not exceeding 2.000 MW; and

 have solar cell efficiency of more than 16% or the module efficiency of more than 15%.

The FiT scheme will apply to these projects for a term of 20 years, commencing on the COD, or the date of coming into operation (ngày vào vận hành phát điện in Vietnamese).

More detailed regulations for rooftop solar power systems

In comparison with Decision 11/2017, Decision 13/2020 provides a more detailed definition of “rooftop solar power systems”, which are solar power systems that:

 have photovoltaic panels installed on the roof of construction work;

 have a capacity not exceeding 1 MW; and

 are directly or indirectly connected to a power grid of 35 kV or lower of the electricity buyer.

In addition, Decision 13/2020 also have a separate Chapter to regulate rooftop solar power systems, including the above-mentioned provision allowing the sale of power generated from a rooftop solar power system to power buyers other than EVN.

Source: https://www.lexology.com/library/detail.aspx?g=b9c48b38-31d7-47c4-b422-74fa63b3e3c4

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