VIETNAM – ROOFTOP SOLAR POWER – NEW PROPOSALS ON THE DEVELOPMENT OF ROOFTOP SOLAR POWER PROJECTS

Since 1 January 2021, there have been no legal instruments in effect guiding the development of rooftop solar power projects in Vietnam (“RTS”). After a period of examining suitable power model, scale and purchase price, in March 2021, the Ministry of Industry and Trade (“MOIT”) submitted the Draft Decision on mechanisms for RTS development for the Prime Minister’s approval.

Notable provisions of the Draft Decision:

1. A rooftop solar power system must satisfy the following conditions:
• Photovoltaic panels must be installed on the roof of construction works;
• Constructions works must have independent functions and purposes (i.e. not constructed to install RTS system);
• RTS system’s capacity must not exceed 01 MWac and 1,25 MWp; and
• RTS system must be connected to a power grid of 35kV or less.

2. Electricity Buyer can be:
(i) Electricity Vietnam (EVN) or an authorized representative of EVN; or
(ii) In case the RTS system is not connected to EVN’s power grids: organizations, individuals purchasing electricity from the Seller/RTS developer or an authorized representative of such organizations and individuals.

In case the Buyer is EVN, the Seller and Buyer must sign the standard Power Purchase Agreement (“PPA”) unless agreed otherwise. The PPA is valid for 20 years from Commercial Operation Date (“COD”) Seller and other independent Buyers can discuss and agree on the order of implementation, installation, connection and maintenance as well as electricity purchase price by themselves in accordance with Vietnam laws.

3. Proposed FiT rate for RTS projects with COD in 2021 and EVN as Buyer:

No. Capacity of the RTS system / Electricity Purchase Price

1 – < 20 kWp: 1.582,16 VND/kWh (Equivalent USCent 6,84/kWh)

2 – From 20 kWp to less than 100 kWp: 1.468,82 VND/kWh (Equivalent USCent 6,35/kWh)

3 – From 100 kWp to 1,250 kWp (less than 01 Mwac): 1.362,41 VND/kWh (Equivalent USCent 5,89/kWh)

4. FiT rate for RTS projects with COD in 2022 and beyond shall be submitted by the Ministry of Industry and Trade for Prime Minister’s approval.

5. RTS system with capacity greater than 100 kWp must self-consume at least 20% of generated capacity per month and is only paid for 80% of total generated amount.

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For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.