|Rooftop solar power installations, be they on private homes or industrial buildings, are on the rise in Vietnam|
“Solar power in Vietnam has become hotter than ever,” said Nguyen Quang Minh, deputy chairman of the Electricity Regulatory Authority of Vietnam (ERAV). Minh said ERAV has taken steps to shape a policy for both small roof-top solar power installations with a net-metering mechanism in households and for large roof-top installations at industrial zones. The boom started when the Vietnamese government’s Decree No.11/2017/QD-TTg on mechanisms for encouraging the development of solar power in Vietnam was released a year ago.
Heating up the market
The Ministry of Industry and Trade (MoIT) recently released impressive figures indicating that the total output of solar power projects approved to be added to the Power Development Plan VII is quite large. The ministry approved more than 70 new projects to be put into operation before June 2019, with the total designed capacity of over 3,000 megawatts (MW). This amount far exceeds the estimated solar power output of 1,000MW by 2020 in the original Plan VII.
Some are calling this a gold rush. The list of renewable energy projects registered by both foreign and domestic investors in Vietnam has been growing consistently, including well-known companies such as Tata Power, Sunseap Group, InfraCo Asia Development Pte., Ltd., ACWA Power, SY Panel Group, AIN Group, Siemens Gamesa Renewable Energy, and Gulf Energy Development.
The central province of Ninh Thuan has the greatest potential for solar power generation, attracting about 140 projects, followed by the neighbouring provinces of Binh Thuan (around 100 projects), Daklak (13 projects), and Khanh Hoa (12 projects).
The MoIT has reported that, as of July, 748 solar roof-top projects had been installed, with the total capacity of 11.55 megawatt-peak (MWp). The installed capacity connected to the grid is dominated by a small number of medium-sized roof-top systems, including the installations of Intel Vietnam in Ho Chi Minh City (220 kWp), Big C Green Market in the southern province of Binh Duong (212 kWp), PUMA/Avery Dennison in the southern province of Long An (100kWp), Deutsche Bekleidungswerke (DBW) in Long An (165 kWp), the National Conference Hall in Hanoi (154 kWp), the UN Building in Hanoi (119 kWp), the new National Assembly in Hanoi (50 kWp), and the MoIT Building in Hanoi (22 kWp).
SolarBK, one of the leading manufacturers specialised in researching, developing, and providing products and solutions for renewable energy in Vietnam, has installed and commissioned 75 solar roof projects with the total capacity of 3 MWp. SolarBK’s BigK solar programme, with its international-standard quality guarantee and reasonable prices, has delivered more than 40 solar photovoltaic (PV) rooftop systems with capacity of 150 kWp in just under a year.
Nguyen Thanh Son, director of Tan Cang-Song Than ICD, Vietnam’s first solar-powered green logistics centre, said, “The trend of green logistics has been developing globally for many years, and customers increasingly attach environmentally friendly clauses to business contracts.”
He added that the solar model is not only economical, but also contributes to environmental protection, helping to reduce CO2 emissions by 518.5 tonnes a year.
“The percentage of households with a solar PV system is quite modest. However, it is a good signal as rooftop solar panels have never been more affordable for homeowners and they are now more aware of using solar energy, especially since the issuance of Decision 11 on mechanisms for encouraging the development of solar power, with an approved feed-in-tariff (FiT) rate of 9.35 US cents,” said a SolarBK representative.
Vietnam’s potential for solar power generation is great, with 1,600-2,700 sunlight hours per year and an average direct normal irradiance of four-to-five kilowatt-hours (kWh) per square metre, comparable to Thailand, the Philippines, Spain, and Italy.
However, the solar PV market in Vietnam is still in its early stages. Its projected potential, in the best scenario, might be 2-5 gigawatts (GW) for residential and commercial rooftops, and 20GW for solar PV plants.
Solar power systems on the roofs of houses in Vietnam help households reduce their bills for monthly power consumption by 50 per cent, all the while contributing to protecting the environment. By spending VND100 million ($4,424) on six solar panels with a lifetime of 20-25 years, a household can save VND1.5 million ($66.37) each month.
Tran Viet Ngai, chairman of the Vietnam Solar Energy, said that commercial and industrial solar PV rooftop applications have great development potential and promise interesting investment opportunities for the private sector. Exploiting the substantial potential of solar energy at production sites would help the manufacturing sector in Vietnam improve the reliability of power supply.
He added that this would also help the commercial and industrial sectors reduce its significant expenses on electricity consumption due to high tariffs during peak hours and cross-subsidisation policies that move funding from large consumers to smaller ones. As well as this, developing solar PV in the Vietnamese commercial and industrial sectors would significantly contribute to the country’s green growth strategy and related efforts to reduce emissions.
The Vietnam Business Forum’s Power and Energy Sub-working Group noted, “Additional policies or modifications can be clarified to establish a better investment environment, creating opportunities for the solar power sector to grow in the near future. This is the best way for Vietnam to reduce its over-reliance on coal-fired power – which is putting the country in a dangerous situation due to environmental concerns – and to build a sustainable and strong economy.”
While there is huge potential in the solar power sector in general and rooftop solar in particular, there are a number of challenges to be tackled, including unbankable power purchase agreements (PPAs), uncertainty regarding the legal and administrative framework, access to financing, additional funding sources, and grid connection, as well as the absence of a competitive power market, with state-run Electricity of Vietnam (EVN) being the only authorised buyer of electricity in the country.
Lawyer Duong Anh from law firm VILAF stressed the key factors in structuring a successful energy development deal. In greenfield investments, foreign investors usually have clear insights into current policy through their legal consultants and are willing to take the risks.
Anh added that in brownfield investments, it is very important to choose the right business partner and consultants to provide legal and technical support and to overcome challenges including obtaining financial support, land clearance, and PPA negotiations with EVN. Given the tight timeline to achieve commercial operation by June 2019 in order to enjoy the FiT 9.35 cents per kWh, it is even more difficult for all the parties to be involved in the transaction.
“The outlook remains conservative, but an upward adjustment of the PPA would ensure that Vietnam’s solar power advantages don’t go to waste,” said Rainer Brohm, consultant for German development agency GIZ.
He suggested that while project financing may be difficult to secure from international banks, solar power projects may present new financing opportunities for local banks. Also, the growth of solar power manufacturing in Vietnam means that solar panels for projects can be locally sourced. With a clear regulatory framework now in place, the stage has been set for the future development of the solar power sector in Vietnam.
The SolarBK representative said that the company is trying to co-operate with local banks and insurers offering opportunities for rooftop solar. The co-operation scheme being explored is an equity model under long-term payment schemes, with the scope to work around the grey areas in regulation and build the trust of customers.
The company showed its ambition at its 2018 annual general meeting, when its subsidiary IREX announced a goal of reaching Tier 1 on the Bloomberg New Energy Finance ranking system by 2020. A Tier 1 solar panel is a panel that is expected to produce power for the entirety of its roughly 25-year lifespan. One of Bloomberg’s criteria is that only solar panel manufacturers that own their manufacturing facility can be included for review.
“Tier 1 is IREX’s next target to participate fully at a global level. This is not IREX’s final purpose but merely our proof that the skills and Vietnamese technology are equivalent to international quality. Tier 1, in brief, is only a standard placed by one organisation, which may be appropriate for now, but nothing can assure its impact in the future given that technology is constantly changing,’ said Nguyen Thuy Ngan, brand director of SolarBK.
Ngan added that this is a promising strategy for Vietnamese renewable energy brands in general and IREX in particular. “Based on Vietnam’s solar energy starting point in terms of conditions, policies, and environment, achieving goals means huge efforts not only for our company but also for domestic financial counterparts,” Ngan said.
- Solar rooftop tile company aims to challenge Tesla
- Encore Renewable Energy Announces Completion of UVM Medical Center Solar Rooftop
- Eagle Oil Holdings Company Inc. (USOTC: EGOH) Merges with State-Of-The-Art Solar Energy Finance Company, Green Stream Finance Inc.
- Soldier of The Week, Major Byron Greene
- New Sustainability Studies major gets green light from faculty
- Buckingham Place a Major Driver for New Home Sales in 2018
- Acetate Tow (Cellulose Acetate Tow) Market Global Trends, Drivers And Growth Projection Upto 2024
- Travel Insurance 2019 Global Market – Challenges, Drivers, Outlook, Growth Opportunities
- Son, grandson preserve major driver of family history
- Global Solar Cable Market 2019 Industry Key Players, Trends, Sales, Supply, Demand, Analysis & Forecast To 2025