As the Vietnam government hasn’t put down any specific guidelines for PPAs to be entered between its utility EVN and the rooftop solar power seller, the utility found it difficult to execute such an agreement, according to Oliver Massmann from Duane Morris LLP law firm. The new purchase system attempts to address this issue. Pictured is the cityscape view in Saigon, Vietnam. (Photo Credit: phminiat/www.goodfreephotos.com)
- Vietnam’s net metering scheme will be replaced by a direct purchase scheme for rooftop solar power generation from sellers
- The net metering scheme required installation of two-way electricity meters, and selling of surplus power from rooftop solar systems to the buyer at the end of the year, or the contract
- Under the new scheme, buyers will be able to directly purchase rooftop solar power from the sellers
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The Government of Vietnam has replaced the country’s net metering payment mechanism for solar power generation from rooftop solar projects with a direct trading scheme. State utility Vietnam Electricity Corporation (EVN) is now eligible to directly pay for the electricity it gets from rooftop solar power sellers.
Under the net-metering mechanism, Vietnam asked rooftop solar power generators to install two-way electricity meters. “Until now, sellers of electricity produced from rooftop solar projects were required to sell it to purchasers based on the net metering method and if the amount of power was greater than the amount consumed by the seller, the surplus would be carried forward to the next trading cycle. At the end of the year or at the end of the contract, any surplus electricity would be sold at a specified price to the buyer,” says consulting and market intelligence firm Enerdata.
The new scheme opens the way for buyers to directly purchase rooftop solar power and also pay separately for the electricity they consume from the grid.
Oliver Massmann from Pennsylvania based law firm Duane Morris LLP said the net metering scheme required the seller to enter into a model power purchase agreement (PPA) with EVN or its authorized subsidiary, but the PPA policy hasn’t been followed by EVN in the absence of specific guidance from the government.
The new payment scheme, says Massmann, attempts to address this issue. EVN will continue to bill its clients for the power it sells to them. For rooftop solar systems, EVN will meter power generation separately and pay the seller.
In April 2017, the government had introduced Decision 11/2017/QD-TTg allowing grid connected solar power project operators to sell power to EVN for a fixed price of VND 2.086 ($0.09) per kWh. The same directive also put in place a net metering scheme for rooftop solar power generation from systems in commercial operation date by June 30, 2019, with the Ministry of Trade and Industry (MOIT) to annually issue the buying and selling prices of power produced (see Vietnam Introduces Solar Incentives). The new regulation has the following code: 02/2019/QD-TTg.
MOIT is now expected to officially announce regulations on the connection of solar projects along with instructions on calculating purchase prices for solar projects as per the Vietnamese Dong (VND) /US dollar exchange rate. According to an article in Asian Power, the requirement for the Ministry of Finance to consider amending regulations on the exemption of rooftop projects from taxes and fees will also be let go.