Vietnam Breakthrough Policy: Raises Rooftop Solar Electricity Sales Limit to 50%

Vietnam - The government has recently implemented a new policy allowing the increase of surplus electricity sales from residential rooftop solar systems to a maximum of 50%. This significant adjustment is expected to provide substantial momentum for the self-consumption model while effectively harnessing distributed renewable energy resources amidst continuing electricity demand growth.

Background on Solar Energy Development in Vietnam

In recent years, Vietnam has achieved remarkable success in renewable energy development, particularly in solar power. By the end of 2022, the total solar power capacity connected to the national grid reached approximately 19,500 MW, with rooftop solar accounting for about 9,500 MW of this capacity.

However, previous policies only permitted households and businesses to sell unused surplus electricity back to the national grid at a maximum limit of 20%. This restriction significantly reduced the economic viability of rooftop solar projects and limited the growth of this model.

Details of the New Policy

According to the newly issued decision, households and businesses installing rooftop solar systems will be permitted to sell surplus electricity back to the national grid at a maximum rate of 50% of their total electricity production. This policy took effect on June 1, 2023.

Specifically, households and businesses will be able to:

• Use free of charge the electricity they produce and consume directly
• Sell back to the national grid surplus electricity up to a maximum of 50%
• Benefit from preferential electricity selling prices as per current regulations
• Receive simplified and expedited grid connection support

Comparison of Old and New Policies

Significance and Impact of the Policy

The increase of the surplus electricity sales limit to 50% is being hailed as a breakthrough decision that will generate numerous positive impacts:

• Enhanced Economic Efficiency: Households and businesses will generate additional revenue from selling surplus electricity, reducing the payback period for rooftop solar projects.
• Accelerated Renewable Energy Development: The policy will encourage more households and businesses to invest in rooftop solar systems, contributing to an increased share of renewable energy in Vietnam's electricity generation mix.
• Grid Load Reduction: As more households and businesses generate their own electricity, the load on the national grid will decrease, particularly during peak hours.
• Environmental Protection: Solar power helps reduce greenhouse gas emissions, contributing to Vietnam's commitment to achieving Net Zero by 2050.

In-depth Analysis of Benefits

According to expert calculations, with the new policy, a household installing a 10 kWp rooftop solar system can:

• Produce and consume approximately 1,200 kWh/month
• Sell back approximately 600 kWh/month (50% of production)
• Generate income from surplus electricity: approximately 4.2 million VND/month
• Achieve an estimated payback period of 4-5 years (reduced from 7-8 years previously)

For businesses, the benefits are even greater due to larger installation capacities and higher electricity consumption needs. A business installing a 100 kWp solar system could potentially achieve payback in just 3-4 years.

Challenges and Solutions

However, the new policy also presents several challenges:

• Grid Management: The increasing number of rooftop solar systems may complicate grid management, particularly regarding frequency stability issues.
• Pricing Mechanism: The 7.09 USD/MWh selling price may not be sufficiently attractive to encourage large-scale investment.
• Technical Infrastructure: Many areas lack the technical infrastructure to support rooftop solar grid connections.

To address these challenges, the Ministry of Industry and Trade has proposed: