Legal Alert – Vietnam – First draft Decree on mechanisms and policies to encourage the development of rooftop solar power systems for self-consumption purpose

To address the yet-to-be-addressed legal issues from the National Power Development Plan VIII (PDP 8) regarding rooftop solar power projects, on 9 April 2024, the MOIT proposed the Draft Decree on development of rooftop solar power (Draft Decree) to the Government. The Draft Decree introduces the following notable provisions:

(i) Scope of application: According to Article 1 of the Draft Decree, the Decree will only regulate rooftop solar power projects for the self-consumption purposes.

(ii) Definition of rooftop solar power (RTS) system: Unlike Decision No. 13/2020/QD-TTg of the Prime Minister on incentives for development of solar power in Vietnam where RTS system is defined to have the maximum capacity of less than 1MW, the Draft Decree provides that there should be no maximum capacity for RTS system. In other words, RTS System with the maximum capacity exceeding 1MW can be recognized and regulated under this Decree.

(iii) Investment models: The Draft Decree regulates both grid-connected and off-the-grid RTS systems whereby (iii1) grid-connected systems must adhere to the planned capacity under the PDP 8 while any electricity surplus can be exported to the grid free of charge and (iii2) off-the-grid systems are not subject to the planned capacity while no electricity surplus can be exported to the grid. It is worth noting that grid-connected projects, under the Draft Decree, require registration with the local competent authority regading investment, trade, construction, fire prevention and fighting, and environment aspects of such projects. On the other hand, off-the-grid projects are not required to be registered but notification to the corresponding provincial People’s Committee before operation is required.

(iv) Incentives: For investors making their investment into RTS systems under the Draft Decree, such investors are entitled to the following incentives (iv1) not being required to convert the land use purpose; (iv2) not being required to include the RTS systems into the national power plan; and (iv3) tax incentives according to the prevailing regulations on tax.

In conclusion, the Draft Decree provides regulations and policies to encourage the implementation of RTS systems for self-consumption purposes. However, there remain unclear issues, i.e. the coverage of DPPA scheme, FOL requirement that need to be addressed in the next draft/official Decree. It is expected that the official Decree can be issued within this year or early 2025.
Please do not hesitate to contact Dr. Oliver Massmann under if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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