Rooftop solar installations skyrocketed in Vietnam last year prior to a hard installation deadline for feed-in tariffs, with more than 9GWp of rooftop solar installed in the country.
Throughout 2020 rooftop solar installations in Vietnam grew by a major 2,435%, rising from a 2019 base of 378MWp to 9.583GWp, spread across almost 102,000 systems.
The growth figures are confirmed by state-owned Vietnam Electricity (EVN), though the numbers have been further revised upward in the past day.
Vietnam rooftop solar installations grew steadily in H1 2020 despite the pandemic and a nationwide lockdown period imposed in the country. Rooftop solar growth continued to accelerate throughout Q3 2020, before skyrocketing in December 2020.
Vietnam’s tremendous rooftop solar market was driven by a second iteration, FIT2 (feed-in tariff) policy paying USD $0.0838 per kWh over a period of 20 years for systems with a Commercial Operation Date of 31 December 2020 at the latest.
The FIT2 was only finalised in early April 2020 after initial expectations were for an extension of the original USD $0.0935 per kWh rooftop solar FIT.
Per the inset chart, cumulative Vietnam rooftop solar reached an impressive 2.876GWp by the end of November 2020 with monthly installation of some 851MWp. While most forecasted a few GWp range of rooftop solar installations in December, EVN connected 6.708GWp in the last FIT2 eligible month.
The above data is from EVN and the Viet Nam Energy Partnership Group (VEPG).
To put this in a Vietnam perspective, the original FIT policy created a solar ground mount boom with 2019 installations of about 5.317GWp from a cumulative 2018 solar base of 106 MWp, per International Renewable Energy Agency (IRENA) Renewable Capacity Statistics.
Furthermore, a notice from the Vietnam Ministry of Industry and Trade (MOIT), dated 31 December 2020, revealed cumulative PV capacity reached 16.449GWp (13.160 GWac) by the year’s end, implying another 1.549GWp of ground mount and floating solar projects also achieved COD under FIT2 in 2020.
The FIT2 rates for ground mount and floating solar projects were USD $0.0709/ kWh and USD $0.0769/ kWh respectively.
However, 38 solar projects equivalent to 2.888 GWac of capacity, did not qualify for FIT2. Perhaps some of these did not meet the rooftop solar requirements. MOIT clarified the rooftop solar definition back in September as a number of agricultural rooftops were built for the sole purpose of installing solar. The late-year surge may have included these structures modified by constructing walls in order to qualify for the FIT2.
Prospects for the extension of the rooftop solar FIT policy have now dimmed, and EVN stated new PPAs of rooftop solar power would stop with the expiration of the FIT2 policy. Perhaps a new FIT would incentivise solar-plus-storage to address peak power demand in Vietnam from 5:30-6:30pm. during and after sunset. Meanwhile, Vietnam has been crafting more focused policies to incentivise renewables for over a year.
A proposed virtual renewable Direct Power Purchase Agreement (DPPA) program would allow factories and business to source 100% renewable energy from private firms via the EVN grid. The innovative policy mechanism has been developed by the MOIT agency, Electricity Regulatory Authority of Vietnam (ERAV), with the support of the United States Agency for International Development (USAID). Multinational brands and foreign direct investors are strong advocates for the DPPA program to power their complex supply chains with renewable energy. A pilot DPPA program was expected last year but may debut in 2021 as technical and legal issues are resolved before the introduction.
Solar auctions are also proposed for direct sale of electricity to EVN. The initial pilot program, outlined in a draft decision, limits participants to ground mount or floating solar farm projects already included in the Power Development Master Plan. Further solar auction criteria include a proposed tariff below FIT2, available EVN grid capacity, and meeting specified COD dates.
Edgar Gunther is a partner with Syntegra Solar and works at the Vietnam EPC joint venture company, Tona Syntegra Solar JSC.