A flurry of recent official communications on the new solar FiT regime have only added to uncertainty about the income stream for solar projects in Vietnam after June 2019.
Following nearly two months of relative silence last draft proposed new FiTs were made public (read about them: here and here), the PM and MOIT have exchanged letters indicating that policy and decision makers are still some distance apart on a final position.
In a letter to the MOIT last week, the PM proposed that the provinces be divided into two regions with different tariffs, half the number of regions proposed by the MOIT recently, and meaning lower overall tariffs for Northern provinces which have barely seen any solar project action since the sun rush kicked off a couple of years ago.
The MOIT responded by urging the PM to further consider the 4 region options it previously tabled in April and May.
On the other hand, the PM’s letter indicates some sympathy for projects struggling to meet the current 30 June 2019 COD deadline, intimating that they ought to be allowed to continue to enjoy the current 9.35c tariff if their efforts to meet the COD deadline have been hamstrung by matters outside their control (e.g. – land clearance). The MOIT response takes a harder line on this, giving its view that the 30 June 2019 deadline should remain a bright line with no exceptions (outside of those Ninh Thuan projects already granted an extension last year).
With the MOIT now seeking further opinions from EVN, the MOF and MOJ, one imagines it is could be risky to assume that the new FiT rates will be officially promulgated prior to the existing ones expiring on 30 June.
The two regions and corresponding FiTs for different kinds of solar projects as proposed by the PM are:
Region I (all Provinces except Region II Provinces)
Floating solar power = VND1,758/ kwh = 7.69 US cents / kwh
Ground mounted solar power = VND1,620/ kwh = 7.09 US cents / kwh
Roof solar power = VND1,916/ kwh = 8.38 US cents / kwh
Region II (Phú Yên, Gia Lai, Đăk Lăk, Khánh Hòa, Ninh Thuận and Bình Thuận Provinces)
Floating solar power = VND1,655/ kwh = 7.24 US cents / kwh
Ground mounted solar power = VND1,525/ kwh = 6.67 US cents / kwh
Roof solar power = VND1,803/ kwh = 7.89 US cents / kwh
Be aware: these are far from final. Watch this space.
For more information about Vietnam’s energy sector, please contact Giles at GTCooper@duanemorris.com or any of the lawyers in our office listing. Giles is co-General Director of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.