New FIT for solar power to take effect on May 22

The New FiT for solar power will be available for projects coming online between May 22 and the end of the year

The new FiT comes nine months after the previous one outlined in Decree No.11/2017/QD-TTg expired on June 30, 2019.

On April 6, the prime minister signed Decree No.13/2020/QD-TTg about the new selling price for solar power. Accordingly, the price for floating solar power is 7.79 US cents per kWh and normal solar power is 7.09 US cents per kWh. In addition, the rate for rooftop solar power is 8.39 US cents per kWh. The decree will come into effect on May 22 and expire on December 31.

The new FiT rates for solar energy producers

According to Decree 13, this FiT will be applied to finished solar farms the investment planning of which was approved before November 23, 2019 with commercial operation date of either the entire project or part of it started between July 1 and December 31, 2020.

In the case of Ninh Thuan province, finished solar farms which are named in the power development planning and started commercial operations before January 1, 2021 with the total combined capacity of 2,000MW will enjoy the 9.35 US cents per kWh rate from the day they start commercial operation. The duration of this rate is 20 years.

Regarding finished projects which failed to have their investment planning approved before November 23, 2019 and entered into commercial operation before January 1, 2021, as well as projects mentioned at the Ninh Thuan case, the selling price will be calculated based on market mechanisms.

The potential for solar energy in Vietnam is 60-100GWh per year for concentrated solar power, while for photovoltaic (PV) systems, it is around 0.8-1.2GWH per year. With around 1,600-2,700 hours of sunlight per year and an average direct normal irradiance (DNI) of 4-5kWh per square metre, the country has huge potential for solar power.

Solar power accounts for only 0.01 per cent of the total output, and the government aims to increase this to 3.3 and 20 per cent by 2030 and 2050, respectively.

The government’s target by 2020 and 2025 is to install 850MW and 4GW, respectively. By 2030, it aims to increase it to 12GW.

Around 4.5GW of solar generation was deployed under the FiT before mid-2019, meeting the 2025 PV targets in 2019. The Government of Vietnam is revisiting its solar targets under the Power Development Plan 8 for 2021-2030 (PDP 8). The current target under discussion for solar generation is 18GW by 2030. The PDP 8 is expected to be finalised and published by early 2020.