As per Dezan Shira & Associates, till July 2018, Vietnam had a total of 11.55 MW of rooftop solar capacity in the form of 748 projects. Now, VinaCapital believes its potential is more than 4 GW for the next 10 years. Pictured is a top down view of Saigon in Vietnam. (Photo Credit: Peter Nguyen/www.goodfreephotos.com)
- According to investment manager VinaCapital, Vietnam has the potential to commission more than 4 GW of rooftop solar over next 10 years
- Commercial and industrial segments alone could account for 95% of this capacity installed
- While there is government support for large-scale solar power development, insufficient transmission and grid infrastructure along with absence of guaranteed off-take are challenges faced by this growing industry
- Rooftop solar then takes care of land availability and transmission issues as commercial and industrial segments can benefit greatly from it
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Vietnam holds promise for more than 4 GW of rooftop solar power capacity to be effectively commissioned in the next 10 years. Commercial and industrial installations will claim 95% of this, according to investment management firm VinaCapital. Till July 2018, 748 rooftop solar power projects were in operation in the country with a total capacity of 11.55 MW, as per Vietnam Briefing, a business news portal produced by the Dezan Shira & Associates.
In a post published by the Vietnam Investment Review, Samresh Kumar, VinaCapital’s Managing Director of Principal Investments, said the country’s electricity consumption is expected to grow at 10% per annum over the next 5 years, but power supply is likely to grow by only around 8.5% thanks to El Nino weather conditions which are bringing down its hydropower potential. Solar can step in to fill up this demand-supply gap.
Currently, Vietnam’s total energy mix has 2% coming from solar. Supportive government policy in the form of an attractive feed-in-tariffs (FIT) and levelized cost of energy production help this renewable resource gain quickly traction, but inadequate transmission infrastructure and absence of guaranteed off-take are problems it sees as challenges to large-scale solar power development here.
Rooftop solar emerges as a viable solution, especially for energy guzzling enterprises in the commercial and industrial segments. Calling rooftop solar a game changer for the country, Kumar bats for the local talent pool and resources for the uptake of solar in Vietnam that relies more on imported solar panels and international consultants which takes money out of the country eventually.
While it holds a lot of promise for the country that has land in short supply, Kumar stresses that developers will need to work with different participants in the ecosystem such as regulators, suppliers, contractors, financiers and consumers to scale up the Vietnamese solar sector.
Through its Decision 11/2017/QD-TTg in April 2017, the Vietnamese government allowed grid operators to sell power to national utility Vietnam Electricity Corporation (EVN) for a fixed price, and also put in place a net metering scheme for rooftop solar power generation from systems in commercial operation by June 30, 2019. In January 2019, the government introduced regulation 02/2019/QD-TTg to launch a new payment mechanism for rooftop solar power generation through which EVN will directly pay for the electricity it gets from rooftop solar power sellers (see New Payment Scheme For Rooftop Solar In Vietnam).