Last year, before the strict deadline for the installation of feed-in tariffs, Vietnam’s rooftop solar installations skyrocketed, with more than 9GWp of rooftop solar installed in the country.
Throughout 2020, the rooftop solar installations in Vietnam increased by 2,435%, from 378MWp in 2019 to 9.583GWp, distributed in nearly 102,000 systems.
The growth data was confirmed by the state-owned Vietnam Electricity Company (EVN), although the data was further revised upwards in the past day.
Despite the pandemic and the country’s national lockdown period, rooftop solar installations in Vietnam have steadily increased in the first half of 2020. Rooftop solar growth continued to accelerate in the third quarter of 2020, and then soared in December 2020.
Vietnam’s huge rooftop solar market is driven by the second iteration of the FIT2 (feed-in tariff) policy. Within 20 years, a system with a commercial operation date of December 31, 2020 will pay $0.0838 per kWh at the latest.
FIT2 was not finalized until early April 2020. The initial expectation was to extend the initial rooftop solar FIT by $0.0935 per kilowatt-hour.
According to the illustration, by the end of November 2020, Vietnam’s rooftop solar energy has accumulated an impressive 2.876GWp, with monthly installations of approximately 851MWp. Although most people predict that rooftop solar installations will reach a range of several GWp in December, EVN connected 6.708 GWp in the last month to qualify for FIT2.
The above data comes from EVN and the Vietnam Energy Cooperation Organization (VEPG).
From the perspective of Vietnam, the initial FIT policy created a boom in solar ground installation. According to the International Renewable Energy Agency (IRENA) renewable energy capacity statistics, the installation volume in 2019 was about 5.317GWp, and the total solar base in 2018 The installed volume is 106 MWp.
In addition, the notice issued by the Ministry of Industry and Trade (MOIT) of Vietnam on December 31, 2020 showed that the cumulative photovoltaic production capacity reached 16.449 GWp (13.160 GWac) by the end of the year, which means that another 1.549 GWp of ground installation and floating solar projects have also been realized. COD under FIT2 in 2020.
The FIT2 rates for ground-mounted and floating solar projects are 0.0709 USD/kWh and 0.0769 USD/kWh, respectively.
However, 38 solar projects with a capacity of 2.888 GWac are not eligible for FIT2. Maybe some of them do not meet the requirements of rooftop solar. MOIT clarified the definition of rooftop solar energy as early as September, because the sole purpose of building many agricultural roofs is to install solar energy. The year-end surge may include these structures modified by building walls in order to qualify for FIT2.
The prospect of extending the rooftop solar FIT policy is now bleak, and EVN stated that with the expiration of the FIT2 policy, the new rooftop solar PPA will cease. Perhaps the new FIT will incentivize solar energy plus energy storage to solve Vietnam's peak power demand from 5:30 to 6:30 pm. During and after sunset. At the same time, Vietnam has been formulating more targeted policies to encourage renewable energy for more than a year.
A proposed virtual renewable direct power purchase agreement (DPPA) program will allow factories and businesses to obtain 100% renewable energy from private companies through the EVN grid. With the support of the United States Agency for International Development (USAID), the Vietnam Electricity Regulatory Authority (ERAV) MOIT agency has developed an innovative policy mechanism. Multinational brands and foreign direct investors vigorously advocate the DPPA program to use renewable energy to power their complex supply chains. The DPPA pilot program is expected to be launched last year, but since technical and legal issues are resolved before introduction, it may make its debut in 2021.
It is also recommended to sell electricity directly to EVN through solar auctions. The preliminary pilot plan outlined in the draft decision limits participants to ground-mounted or floating solar farm projects that are already included in the power development master plan. Further solar auction criteria include proposed tariffs below FIT2, available EVN grid capacity, and meeting specified COD dates.
Edgar Gunther is a partner of Syntegra Solar and works at Tona Syntegra Solar JSC, an EPC joint venture in Vietnam.