Rooftop solar energy systems for onsite consumption in Vietnam

Generally, rooftop solar power projects in Vietnam are usually structured and operated in the following key business models: The first model is “roof owner owns all” meaning that the rooftop solar project shall be financed, owned and operated by the roof owner itself, and all energy generated from the project shall be consumed by the very roof owner. The second one is that the roof owner shall grant another party (i.e., the system investor) the right to access and use its roof to build up the rooftop solar system and upon the operation of the project, the roof owner shall buy all or part of the energy generated therefrom which is normally at the price lower than that of Vietnam Electricity Corporation (“EVN”). Between these two models, the second one seems to be more popular given that under this model while the roof owner neither needs to invest a significant capital for building up the systems nor bear other risks in terms of system maintenance, it still can buy the electricity with a good price.   

The Vietnamese government currently has issued regulations supportive for the development of solar power projects in general and those for on-site use in particular to lessen the burden on transmission network and to reduce curtailment issues with the renewable. Apart from Decision 13/2020/QD-TTg dated 6 April 2020 on mechanisms encouraging solar power development in Vietnam, the government has recently adopted the Power Development Planning 8 on 15 May 2023 in which it emphasizes the importance and encourages the development of rooftop solar energy systems for self-consumption by households or corporate consumers. For instance, the capacity for this type of renewable energy project is estimated to increase by 2,600MW by 2030 prioritized for unlimited capacity development subject to reasonable cost and utilizing available grid connection facilities without any upgrade; and would be not limited for development by 2050. Also, the government sets the goal that 50% of office buildings and residential houses will use self-produced rooftop solar power for on-site consumption by 2030. The generated electricity will be used for onsite consumption without connecting to the regional or national grid. 

It should be noted that in addition to very supportive polices, statutory procedures and requirements for conducting this type of solar power project are less complicated than those of the renewable energy projects connected to the grid. For instance, while the renewable energy projects connected to the grid can only be invested for development after obtaining the permission from EVN or its authorized member entity thereof for connecting to the national grid system, the rooftop solar power system for self-consumption does not need to do so because of its non-connection to the national grid. In addition, with capacity no more than 1MW, the investors may invest in installing the rooftop solar power systems then generating the electricity for household or corporate consumers without required a power generation license, which is significantly different from the other renewable power systems (e.g., grid-connected solar power, onshore wind power).  

Numerous regulations relating to the rooftop solar power project are still too general and incomprehensive, leading to difference and inconsistence in interpreting and applying the laws amongst competent authorities. This, in turns, creates difficulties to the developers/investors to carry out their manufacture and generation of electricity. For instance, some localities have an inconsistent understanding and not yet allowed the installation of rooftop solar power for onsite consumption without an assessment of the whole area's environmental impact report. Also, there is currently no specific regulation on firefighting and prevention for rooftop solar power projects, making local authorities unable to check safety when taking over or inspecting during the operation of rooftop solar power projects for self-consumption.

In principle, the current laws provides that the rooftop solar power developers can sell the remaining electricity, after generated for onsite consumption, to EVN or another off taker. However, due to the lack of specific guidance on connection of such excess electricity to the grid at the moment, the excess electricity may not be conveyed back to the national grid for selling to EVN or another off taker. 

In conclusion, while the future of the renewable energy industry for self-consumption in Vietnam is very potential, Vietnamese governments and competent authorities still need to continue to enhance current regulations in this area to overcome the above challenges and facilitate a favorable environment for investing and develop solar power projects in general and rooftop one-site consumption ones in the country.