The lack of legal regulations prevents the development of roof photovoltaic systems

Rooftop solar is considered by many to be a sensible option for industrial parks (IPs), enabling increased electricity supply and compliance with environmental regulations, while also providing benefits in attracting domestic and foreign investment. However, the installation and use of rooftop solar energy in IP in Vietnam still faces a number of difficulties.

Speaking at a recent conference on “Rooftop Solar Power under IP: Demand and Enterprise Solutions”, Mr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute of Economic and Policy Research (VEPR), said that there is still a possibility of installing rooftop solar panels power supplies on the roofs of production workshops in IP. Many companies also wish to use and access this renewable energy source to secure eco-certification for their exports.

Self-produced, for personal use

According to the State Office, as of December 31, 2023, Electricity of Vietnam (EVN) and its energy subsidiaries have signed rooftop solar power purchase agreements with people and organizations with 103,509 rooftop photovoltaic systems with a total capacity of 9,595,853 kWp. Steering Committee for Energy Projects. These rooftop photovoltaic systems were installed based on the mechanism to encourage the development of solar energy projects in Vietnam by the Prime Minister’s decision.

At the end of 2023, approximately 11.135 billion kWh had been supplied to the national grid, accounting for 3.97% of the total volume of electricity produced and imported by Vietnam.

These rooftop solar systems were installed, assessed and had purchase agreements signed with EVN or its representatives before the expiry of the feed-in tariff (FIT) pricing mechanism on December 31, 2020.

Mr. La Hong Ky, representative of the Office of the State Power Project Steering Committee, said that although the new solar trading mechanism has not yet been issued, many rooftop solar power systems have been installed for self-use as of 2021. As of July 2023, they have been installed approximately 1,030 rooftop solar power systems for self-use by individuals and organizations, mainly IPs and limited liability companies, with a total capacity of 399.96 MWp.

Rooftop photovoltaic systems with a capacity of 500 kWp and above account for 76% of the total photovoltaic capacity on roofs. These roof systems are mainly concentrated in the southern region of Vietnam (over 60%), including 3.69% in Ho Chi Minh City, and the central region (31.96%). Meanwhile, the northern region accounts for only 6.07%, including 0.35% in Hanoi.

The electricity generated on these systems managed by EVN’s Southern Power Corporation and Central Power Corporation, which is resold to the national grid, represents 59% and 33.78% of total annual rooftop solar power generation, respectively.

Obstacles that need to be removed

Rooftop solar offers many benefits to both residents and Vietnam’s national power grid. However, Mr. Viet noted that one of the barriers discouraging companies from getting involved is the lack of clear mechanisms and policies to encourage and promote installations. Barriers in procedures for obtaining investment licenses also remain.

Ms. Tran To Loan, deputy CEO of Sao Do Group, said that the development of rooftop solar in IP continues to face obstacles related to legal issues, mechanisms and policies, hindering IP’s transition to renewable energy. She added that if solar energy generated in a given IP cannot be resold to the national grid, it would be a huge waste of energy.

The lack of electricity trading mechanisms with IP addresses also makes the development of rooftop solar a problematic endeavor.

Mr. Nguyen Vu Chien, deputy head of the board of IP in northern Nam Dinh Province, said that the announcement by EVN’s Northern Power Corporation that power companies in the region had suspended solar connections to the national grid worried local companies that had invested in solar power. on the roof.

Another issue is costs. Producing 1 MW of rooftop solar energy requires an investment of about VND13 billion ($520,000), which has many companies concerned about recovering capital in the future. The power generation time is also quite short, which eats into profits.

Assessing the role that rooftop solar plays in Vietnam’s energy supply, Tran Viet Nguyen, deputy head of commercial at EVN, said its strong development from 2017 to 2020 has helped the electricity sector and EVN cope with the pressure on energy deliver. There are currently over 103,000 rooftop solar projects across the country with a total capacity of over 9,500 MW, over half of which are IP.

In addition to the benefits, the development of rooftop solar has also presented some challenges. Firstly, too much renewable energy connected to the national grid, particularly rooftop solar and wind, can sometimes put pressure on grid operation. However, this challenge was taken up when necessary. Secondly, there were difficulties related to governance, mechanisms and policies. Since the FIT pricing mechanism expired in 2020, no new policies have been issued for the development of rooftop solar. The Ministry of Industry and Trade is currently working on a draft decree to encourage the use of rooftop solar energy, while EVN is actively proposing related mechanisms and policies.

The clear rules you need

To continue the development of rooftop solar in IP, Viet called for the adoption of clear policies on installation and performance. It is also necessary to soon issue legal documents and guidelines regarding procedures related to investments, planning, construction, environmental protection and fire protection and prevention. To facilitate investment, management should also be decentralized and entrusted to appropriate local agencies.

Companies are counting on greater support from the government, international organizations and banks to secure the necessary capital and access to incentives and preferential tax policies if they are to develop rooftop solar energy. There is also a need to build and operate an intelligent, flexible and secure network infrastructure to ensure connections between supply and demand in enterprises in the IP territory.

Mr. La Hong Ky of the Office of the State Energy Project Steering Committee recommended continuing rooftop solar installations, but also believes that clear mechanisms are needed to ensure equal development among regions and prevent any massive overdevelopment.

The government should delegate tasks to relevant ministries and agencies to quickly issue a set of technical standards for the development of rooftop solar PV and the necessary evaluation criteria.

Mr. Phan Cong Tien, a renewable energy market researcher, proposed issuing rooftop solar policies based on existing rules to set retail prices and adjust electricity calculation methods, while developing the electricity trading market under a self-balancing mechanism.

It is also necessary to carry out annual independent assessments on the connection of renewable energy to the national grid, which would help in the proactive development of renewable energy.