Vietnam lacks legal framework to incentivize rooftop solar energy for self-consumption: ministry

The Ministry of Industry and Trade says rooftop photovoltaic solar power works meant for self-consumption only are yet to be incentivized because a relevant legal framework does not exist.

A draft decree prepared by the ministry says that rooftop solar energy works not connected to the national grid and power generated from photovoltaic (PV) panels on the roof of warehouses and factories in industrial parks will be regulated by other mechanisms like direct power purchasing agreements (DPPA).

It elaborated that the “self-production, self-consumption” term is not defined in any electricity-related regulations. The ministry will therefore clarify its definition when the Law on Electricity is amended in the future.

The National Power Development Plan VIII for the 2021-2030 period, widely known as PDP8, approved by the prime minister in May this year, states that solar energy for self-consumption that is not connected to the national transmission grid can be developed without limits.

Meanwhile, the ministry’s latest draft decree regulates incentives for rooftop solar power works on residential and office buildings, connected to the national grid via agreements and not sold to a third party, are eligible for government incentives.

It notes that rooftop solar power is a clean energy source that helps ensure supply and reduce emissions.

Adam Sitkoff, executive director of AmCham Hanoi, told The Investor that they have asked for government support to allow companies to implement renewable energy solutions for self-consumption that are not connected to the power grid, arguing that “this is the most timely means of managing demand through the power shortages.”

Some 200 megawatts of rooftop solar power have been developed in Vietnam over the past three years.

PDP8 envisions that 2,600 MW of rooftop solar power will be developed by 2030, with up to 50% of office buildings and residential buildings having such installations.

The ministry had earlier proposed state-management of rooftop solar projects meant for self-consumption, saying this was required to prevent uncontrolled development and ensure compliance with the master plan.