Rooftop solar power incentives only for homes, public buildings: ministry

The Ministry of Industry and Trade is against extending rooftop solar power development incentives to other groups before first priority recipients - households and public offices - are covered.

In a report on promoting rooftop solar power sent to Prime Minister Pham Minh Chinh, the ministry says the list of beneficiaries can be expanded after the first two groups are covered.

The report was responding to suggestions from other ministries and relevant stakeholders that the list of beneficiaries should be extended to other buildings like offices, schools, universities, hospitals, industrial parks, hotels, households with farms, warehouses attached to houses, bus stations, seaports and so on.

The ministry (MoIT) also cited instructions from Deputy Prime Minister Tran Hong Ha who’d said houses and public offices should be the first beneficiaries; and expansion would be thought of in future regulations.

Vietnam’s Power Development Plan VIII (PDP VIII), approved in mid-May, says that by 2030, half the office buildings and homes in the country would be powered by rooftop solar panels, but this source would not be connected to the national grid.

PDP VIII also mentions the need for prioritized plans and breakthrough policies to promote rooftop solar power, especially in areas more prone to power shortages like the northern region and for generation of solar power not used for trading.

The master plan envisages that by 2030, the capacity of not-for-trading rooftop and other forms of solar power generation would increase by about 2,600 megawatts.

"With this scale, there is no need to work out an incentive mechanism for installing rooftop solar systems," the MoIT wrote.

It argued that if 12.5% of houses in Vietnam make such installations this year, each for one kilowatt, the target in the master plan is already met. This is not to mention Ho Chi Minh City’s rooftop solar power generation from offices and not-for-trading solar power, which is part of a specific development mechanism already designated to the southern economic hub.

In its report, the ministry has proposed that the Prime Minister allows development of 2,600 MW of not-for-trading rooftop solar power by 2030. This source would not be connected to the national grid.

Meanwhile, the Ministry of Planning and Investment (MPI) has said that this proposal is not specific enough to lure investors. It wants the MoIT to make clear for investors the exemptions or reductions in specific taxes and fees; and to clarify other relevant issues.

Rooftop solar power projects in Vietnam have been attracting foreign investors. 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 in its presentation.