Vietnam’s solar strategy for trade-tense times
Prime Minister Pham Minh Chinh on April 15 issued Decision 768 approving Vietnam's Amended National Power Development Plan VIII for 2021-2030, with vision to 2050. The decision reaffirms the government's commitment to renewable energy and positions the country as a regional frontrunner in the global energy transition, writes Dr Nguyen Vinh Khuong, a lecturer in electronic and computer systems engineering at RMIT Vietnam.
Dr Nguyen Vinh Khuong, a lecturer in electronic and computer systems engineering at RMIT Vietnam. Photo courtesy of RMIT.
The numbers tell a compelling story. Vietnam possesses an estimated solar potential of 963,000 MW - a staggering figure that dwarfs its current capacity of 16,600 MW. With 72 GW of potential offshore wind projects along its 3,260-kilometre coastline, Vietnam's renewables future seems blindingly bright.
From ambition to implementation
Decision 768 establishes an ambitious roadmap: renewable energy will constitute from 28% to 36% of Vietnam's energy mix by 2030, scaling dramatically to 74% to 75% by 2050. This transition isn't aspirational; it's backed by $15.5 billion secured through the Just Energy Transition Partnership with the EU and UK in late 2022.
Vietnam's renewable success story is unfolding. According to Global Energy Monitor, the country currently operates 19.5 GW of utility-scale solar and wind capacity, more than double the combined capacity of all other ASEAN nations. Renewables now account for 25% of Vietnam's energy mix, significantly outpacing the regional average of 9%.
A wind power farm project in Vietnam. Photo courtesy of the government's news portal.
The China dependency dilemma
Despite this remarkable progress, Vietnam faces a critical vulnerability. Approximately 90% of equipment for renewable energy projects is imported, with a reliance on Chinese manufacturers. This exposes Vietnam to geopolitical and supply chain risks as global trade tensions intensify.
The impact is already evident. Chinese businesses in Vietnam, such as Jinko Solar and Trina Solar, face the U.S. tariffs of nearly 245% and 202%, respectively, following the U.S. Administration’s announcement in April 2025. Some Vietnamese solar exports to the U.S. now face tariffs as high as 813.92%, dramatically increasing project costs and potentially slowing industry momentum.
Infrastructure challenges: the grid bottleneck
Vietnam's renewable energy ambitions face another formidable obstacle: grid infrastructure that cannot keep pace with generation capacity. While a 50-100 MW solar project can be developed in six months, transmission infrastructure requires two to three years to implement.
This mismatch has created a bottleneck that threatens to undermine investor confidence. Of the 86 GW of prospective utility-scale solar and wind capacity identified in Vietnam, 2% is currently under construction - a stark indicator of the challenges ahead.
Turning trade tensions into strategic advantage
Paradoxically, global trade disputes may offer Vietnam a unique opportunity to strengthen its renewable energy sector. As companies worldwide seek alternatives to Chinese manufacturing, Vietnam could position itself as a strategic hub for renewable energy manufacturing.
By developing domestic production capacity for solar panels, batteries, and related technologies, Vietnam could reduce import dependence while creating high-value jobs and fostering technological innovation.
Existing trade agreements, including the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, provide competitive access to diverse markets, attracting international investment and technology transfer.
The path forward: building resilience
For Vietnam to maintain its leadership in renewable energy, several priorities emerge. Fostering domestic manufacturing through financial support, tax breaks, and streamlined regulatory processes. Strengthening international partnerships will facilitate technology transfers, workforce training, and joint ventures, reducing import dependency.
Another critical focus is accelerating investments in research, innovation, and technical solutions. Prioritizing research and development (R&D) in renewable technologies and energy storage systems can position Vietnam as a technology leader, enhancing competitiveness and resilience. Universities, research institutions, and the private sector should collaborate to develop innovative solutions tailored to local conditions.
Investments in grid modernization and advanced energy storage solutions are also important. Upgrading infrastructure will enable more efficient integration and stabilization of intermittent renewable energy sources, mitigate curtailment issues, and enhance reliability. Promoting public-private partnerships (PPPs) can mobilize additional resources and technical expertise, expediting infrastructure enhancements.
Establishing stable, transparent, and long-term renewable energy policies is another priority. Predictable regulatory frameworks, supported by clear and consistent incentives, will attract sustained international funding and strengthen investor confidence. Clear policy communication will position Vietnam as a dependable, attractive global renewable energy investment destination.
Although trade tensions and reciprocal tariffs pose risks, they offer Vietnam a unique opportunity to build an innovative and resilient renewable energy industry. By leveraging its resources, addressing vulnerabilities through research and technical solutions, and adopting comprehensive policies, Vietnam can transform these challenges into a sustainable growth trajectory.
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