Vietnam gov't lowers FIT for solar power projects

The Vietnamese government has enacted a list of new feed in tariffs (FITs) for solar power in Vietnam that is lower than the previous one in the context there has been a wave of investment in this renewable energy.

A solar power project (Photo: the EVEF)

According to Decision 13/2020, which will take effect from May 22 and replace Decision 11/2017 that was effective until June 30, 2019, the FITs for ground-mounted, rooftop and floating solar power projects are VND1,644 (7.09 US cents) per kWh, VND1,943 (8.38 US cents) per kWh, VND1,783 (7.69 US cents) per kWh, respectively. The new FITs are lower than the preferential price of VND2,086 (9.35 US cents) per kWh regulated in Decision 11/2017.

The new FIT scheme is applicable for solar power projects that were approved by competent authorities before November 23, 2019 and started commercial operations (partly or fully) between July 1, 2019 and December 31, 2020. It will be valid for 20 years from the date that a solar power project is put into commercial service.

As for the south-central province of Ninh Thuan, the preferential buying price of VND2,086 (9.35 US cents) per kWh will be applied to solar power projects having a capacity of up to 2,000MW that have been added to the national power scheme and scheduled for commercial operation before January 1, 2021.

Solar power projects excluded from the above-mentioned projects will have FITs determined through bidding mechanism. This decision has been awaited by large-scale solar investors and households and businesses investing in rooftop solar power because the old decision expired on July 1, 2019.

Tran Viet Ngai, chairman of the Vietnam Energy Association

Tran Viet Ngai, chairman of the Vietnam Energy Association told Hanoitimes that the new FITS continue to attract those who have an interest in the solar power industry in Vietnam, even though they are cheaper than the current ones. “Under the new decision, the FITs will be valid for 20 years that is not consistent with the auction plan for solar power. The bidding mechanism should apply for all solar projects in the country,” Ngai urged.

Vietnam will launch a bidding mechanism in the solar power industry in the next couple of months but delayed due to the Covid-19 pandemic. It will be launched in the fourth quarter of 2020, according to Ngai. 

By the end of June, Vietnam had 82 solar power plants with a cumulative capacity of 4.46GW connected to the national grid.