NDO – Southern Vietnam is anticipated to face power shortages of up to 3.7 billion kWh in 2021, nearly 10 billion kWh in 2022 and approximately 12 billion kWh in 2023, according to Electricity of Vietnam (EVN). Therefore, the development of solar energy projects including rooftop solar power is considered one of the solutions to reduce pressure on the electricity sector.

Solar power development has yet to meet potential

In Vietnam, the development of solar power including solar power systems on the roof of houses is considered to have a lot of potential. Specifically, the annual radiation measured in the Southern region and South Central provinces is approximately 1,600 kWh/m2. According to a report on the technical assessment of the potential of rooftop solar energy in Vietnam released by the World Bank in 2017, the potential of solar energy in Ho Chi Minh City is about 6,300 MW. Meanwhile, Hanoi has average monthly sunshine hours of about 1,466.1 hours per year, which is listed in the areas of average solar radiation of 3.3 to 4.1 kWh/m2 per day.

According to the Ministry of Natural Resources and Environment, the generation of every 1 kWh of solar energy will help to reduce CO2 emissions by 0.6612 kg. If solar energy is promoted, it would be a clean energy resource with rather high output, while helping to minimise the budget invested in electricity generation and transmission facilities.

In many countries, solar energy is also a developed industry, creating jobs and income for many people. It is estimated that if only two million rooftops in Vietnam were installed with solar panels with a capacity of 10 kW per roof it would reduce the corresponding amount of 16 million tonnes of coal per year used for coal fired power plants.

Prof. Dr. Tran Dinh Long, vice chairman of the Vietnam Electrical Engineering Association, said that the output of solar power systems generated at public facilities in the morning can meet 25 to 30% of power demand of these facilities and up to 60-65% of power demand during noon and sunny hours. Tran Hong Ky, an energy researcher at the World Bank, said that about 30% of the roofs in Ho Chi Minh City and Da Nang are capable of installing rooftop solar energy systems effectively.

With the goal of reaching solar output of 1 GWp by 2020, the Prime Minister approved Vietnam’s renewable energy development strategy by 2030, with a vision to 2050, along with a number of mechanisms to encourage the development of solar power projects. The Ministry of Industry and Trade also issued Circular 16 on solar project development and electricity purchase contracts in a bid to solve problems related to tax, payment methods and others at rooftop solar power projects.

Deputy head of EVN Business Division Tran Viet Nguyen said that offices and branches of EVN installed rooftop solar systems at 54 locations with a total capacity of 3.2 MWp in 2018. Approximately 1,800 customers including offices, businesses and households are installing rooftop solar systems with a total capacity of 30.12 MWp.

A representative from Ho Chi Minh City Power Corporation (EVN HCMC) said that the implementation of rooftop solar power in Ho Chi Minh City has proved effective. EVN HCMC has installed rooftop solar systems with a total capacity of nearly 1,130 kWp and is continuing to deploy other systems with a capacity of 2,658 kWp.

EVN General Director Tran Dinh Nhan said that the above figure is too small compared to the potential of solar power in Vietnam, citing a lack of specific regulations on electricity purchasing when households connect their solar power systems to the national grid. In addition, information about rooftop solar power remains limited.

EVN cannot sign power buying contracts with customers because there are no official instructions on how to buy solar electricity from households. Customers still hesitate to invest in solar systems due to the lack of information about product quality, operating methods, equipment warranty, and others.

According to experts, the installation of solar power panel systems has become easier thanks to the development of technology. However, the cost of investment at around VND20-VND25 million (US$1,000) per kWp remains high, while there is no support policy for solar power projects, leading to the rejection of households.

More efforts needed

EVN General Director Tran Dinh Nhan affirmed that the electricity sector will assist households and enterprises in installing solar power systems and help them with procedures for connecting to the national grid, in addition to the signing of power purchase contracts. He noted that the buying of solar electricity connected to the grid will be done immediately when there are guidance circulars issued by the authorities.

Furthermore, EVN will bear the full costs of the installation of electricity meters to measure the volume of electricity consumed as well as connected to the grid. EVN also proposes ministries and agencies to promote information on the benefits of rooftop solar power to the public. The Government should encourage agencies, units, organisations and People’s Committees of provinces and cities to establish rooftop solar systems through providing them with supporting mechanisms.

Dao Minh Hien from Power Engineering Consulting Joint Stock Company 2 (PECC2) said that there are several models to support people to install rooftop solar panels such as power companies fund, rent or lease roofs or rooftop solar power systems.

EVN is actively cooperating with international partners to learn and approach policies to encourage investment in the development of solar projects in Vietnam in addition to updating technology and solutions to develop rooftop solar systems for customers.

Managing Director, Principal Investments at VinaCapital, Samresh Kumar, said that the mobilisation of international capital is necessary to boost the development of rooftop solar energy, particularly on an industrial scale. International financial institutions will directly give loans to solar energy developers to help them invest in solar projects, or provide loans through domestic financial intermediaries.

According to Director of Green Innovation and Development Centre (GreenID) Nguy Thi Khanh, one of the reasons for the rejection of rooftop solar energy in Vietnam is the lack of information on the system including categories, technical regulations, costs, chance to get back your investment, and others. Therefore, an important solution to promote the development of rooftop solar energy is to boost communication to the community, especially informing households of the investment capacity and the practical benefits of this model.

Deputy Minister of Industry and Trade Hoang Quoc Vuong said that a circular to amend Circular 16 will soon be issued by the ministry, after completing the collection of comments from ministries and sectors. This new document will specify the method of payment for the purchase of solar output through specific contracts, thereby helping the relevant parties to have a reasonable payment mechanism in order to overcome shortcomings of Circular 16. The legal document is also expected to encourage investment in and development of rooftop solar energy in the future, Vuong noted.