POTENTIAL POINTS IN DECREE NO. 13/2020/QD-TTG OF THE PRIME MINISTER ON THE MECHANISM FOR ENCOURAGEMENT OF SOLAR ENERGY DEVELOPMENT IN VIETNAM

To promote the development of the solar energy industry, the Prime Minister issued Decision No. 13/2020/QD-TTG dated April 6, 2020, on a mechanism to encourage solar power development in Vietnam. This decision is reflected in the policies to support solar power, in which there are points that investors should be mindful of.

1. About solar power projects

Investors should note the distinction between rooftop solar power systems, grid-connected ground-mounted solar power projects, and floating solar power projects to determine the selling price of electricity to EVN. In this regard, Article 3 of Decision No. 13/2020/QD-TTG dated April 6, 2020, stipulates:

The rooftop solar power system is a solar power system with photovoltaic panels installed on the roof of a building and with a capacity of no more than 01 MW, connected directly or indirectly to the power grid—voltage of 35kV or less of the electricity buyer.

A grid-connected solar power project is a solar power project that is directly connected to the national electricity grid, except for rooftop solar power systems that meet the above regulations.

A floating solar power project is a grid-connected solar power project with photovoltaic panels installed on a floating structure.

Ground-based solar power projects are grid-connected solar power projects, except for floating solar power projects.

2. Solar power purchase price list

Solar power purchase price list attached to Decision No. 13/2020/QD-TTG dated April 6, 2020, of the Prime Minister

TT Solar power technology Electricity price
VNĐ/kWh Equivalent UScent/kWh
1 Floating solar power project 1.783 7,69
2 Ground solar power project 1.644 7,09
3 Rooftop solar power system 1.943 8,38

Note: The exchange rate is based on the central exchange rate of the Vietnamese Dong to the US Dollar as announced by the State Bank of Vietnam on March 10, 2020.

The electricity purchase price list and the term of the solar power business contract for solar power projects are 20 years from the date of commercial operation.

The above electricity purchase tariff applies to grid-connected solar power projects that have been decided on investment policies by a competent authority before November 23, 2019, and have a commercial operation date of the project or part of the project. Project from July 1, 2019, to the end of December 31, 2020, and the rooftop solar power system has time to put into operation, generate electricity, and certify the meter readings from July 1, 2019, to December 31 2020.

The electricity purchase tariff of this decision is applied to projects with an efficiency of solar cells more significant than 16% or modules greater than 15%.

3. Some notes on grid-connected power projects

For Ninh Thuan province, the purchase price of electricity from grid-connected solar power projects is already included in the electricity development planning at all levels. It has a commercial operation date before January 1, 2021, with no more than 1 year of accumulated capacity. Exceeding 2,000 MW is 2,086 VND/kWh, applied 20 years from the date of commercial operation.

The electricity purchase price is adjusted according to the VND/USD exchange rate fluctuation. The applicable exchange rate is the central exchange rate of Vietnam Dong to the US dollar announced by the State Bank of Vietnam on the date the Seller issues the payment invoice.

The leading equipment of a grid-connected solar power project must meet Vietnamese technical standards and regulations or international standards (IEC). The investment and construction of grid-connected solar power projects must comply with law provisions. The quality of grid-connected solar power projects must meet the technical requirements on voltage, frequency, and other conditions on the operation of the national power system according to current regulations.

The solar power seller is responsible for investing, installing, operating, and maintaining, organizing the inspection, calibration, and testing of power metering equipment by the law on measurement.

The Solar Power Seller and the Power Buyer shall agree on the connection point by the approved planning. Suppose the connection point is different from where the metering equipment is located. In that case, the electricity seller shall bear the loss of power on the connection line and the failure of the power plant’s step-up transformer.

The investment and construction of grid-connected solar power projects must comply with the provisions of the law on investment, construction, electricity safety, land, fire prevention, and fighting, environmental protection, and other regulations. of relevant legislation.

4. About the rooftop solar power system

The rooftop solar power system is a solar power system with photovoltaic panels installed on the roof of construction work and with a capacity of not more than 01 MW, directly or indirectly connected to the power grid with a high power supply—voltage of 35 kV or less of the electricity buyer.

Rooftop solar power systems can sell part or all of the generated electricity to the Buyer being the Vietnam Electricity Group or another organization or individual, if they do not use the electricity of the Vietnam Electricity Group’s grid.

According to current law, if the Buyer is not Vietnam Electricity or an authorized member unit, the parties shall agree upon the electricity purchase price and electricity purchase contract.

Rooftop solar power systems with a direct or indirect connection to the national grid are invested and developed after registering with the Vietnam Electricity Group or a member unit approved by the Electricity Group Vietnam authorized.

Vietnam Electricity Group invests, installs, and maintains electricity metering equipment for rooftop solar power systems. It also signs power purchase and sale contracts with Vietnam Electricity or its member units are authorized by the Vietnam Electricity Group.

According to current regulations, organizations and individuals investing in installing rooftop solar power systems must ensure electrical safety, construction work safety, environment, fire prevention, and fighting.

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