Incentives proposed for solar power development at homes, official buildings

Households and offices that install rooftop solar panels will enjoy a number of incentives such as tax and fee breaks and preferential loans, according to the Ministry of Industry and Trade (MoIT).

In a proposal submitted to Prime Minister Pham Minh Chinh, the ministry said these incentives aim to gradually implement the freshly-approved Power Development Plan VIII (PDP VIII). By 2030, half of office buildings and homes in the country will be powered by rooftop solar panels. However, this source will not be connected to the national grid.

Under the draft, people and businesses that install rooftop solar panels will be exempt from electricity operation permits and electricity business registration certificates, and enjoy tax and fee breaks, as well as preferential loans. Offices of administrative agencies and ministries will be given funding to install rooftop solar panels for self-use purposes.

Organizations and individuals investing, installing and using rooftop solar power systems must satisfy safety requirements.

However, a mechanism for the installation of solar power panels at factories has not been released by the ministry.

The MoIT said that in the immediate future, it will encourage the development of solar power sources at homes, offices and businesses for self-use purposes with appropriate capacity, without much impact on the operation of the power system.

For rooftop solar development at factories and large-scale production enterprises, more time is needed to research and appraise the capacity, avoiding massive development that puts pressure on the power grid, it noted.

In recent proposals to the Ministry of Industry and Trade, state utility Vietnam Electricity (EVN) said it plans to issue a mechanism for developing rooftop solar power for on-site household consumption. This would also help solve power shortages in 2023 and the following years, it added.

The Vietnamese government has set priorities and breakthrough policies to develop rooftop solar power at homes and construction works, especially in regions at risk of power shortages such as the North.

According to EVN's National Load Dispatch Center, the installation capacity of rooftop solar power in Vietnam as of March 2023 was estimated at 7,660 MW, or 9.65% of all power sources. It is estimated to increase by 2,600 MW by 2030.

Companies in Vietnam are incorporating sustainable practices into their operations, advancing the adoption of renewable energy sources for their manufacturing facilities.

Rooftop solar power projects in Vietnam have also been attracting foreign investors with the UK's Coro Energy acquiring a 2.39 MW portfolio from local firm Kimy Trading and Service JSC for $1.3 million the latest example.

But an absence of rules and regulations enabling the signing of power purchase agreements (PPAs) to sell rooftop solar power to the grid via EVN is a problem.

At the Vietnam Business Forum (VBF) conference this March, the American Chamber of Commerce (AmCham) noted that crucial to attracting domestic and international investment are bankable PPAs for sustainable power.

“Green financing offers favorable rates to private investors to reduce carbon emissions but the legal framework should be updated to clarify criteria for approving green finance. We continue to see privately financed growth in off-grid power projects, especially rooftop solar systems in the form of onsite corporate PPAs.

“These projects demonstrate that producers and users are able to develop sustainable long-term agreements, supporting the argument in favor of EVN workout pricing for using the national grid. In the meantime, timely approval of the onsite corporate PPAs in the first quarter of 2023 – an important mechanism for attracting private investment – would be much welcomed by the industry,” AmCham said.