In recent years, in order to alleviate the electricity shortage, Vietnam has vigorously developed new energy sources such as solar energy and promoted energy transformation. In April 2017, the Vietnamese government issued a policy to encourage the development of photovoltaic power generation, and provided financial support to the photovoltaic power generation plans formulated by various regions. It promised that the State Grid would purchase photovoltaic power at a price of 9.35 cents per kWh for a period of 20. In addition, the power sector is required to improve facilities such as power grids and substations to ensure smooth integration of photovoltaic power. 

In order to attract investment in photovoltaic power plants, some places in Vietnam also introduced measures such as income tax concessions and reductions in land and water rents. Stimulated by favorable policies, many photovoltaic power plant projects were put into operation, and new energy production capacity increased sharply. For a time, Vietnam became one of the most active and attractive new energy markets in Southeast Asia. 


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According to statistics from the Ministry of Industry and Trade of Vietnam, as of now, 135 photovoltaic power generation projects have been approved nationwide, with a total installed capacity of 8.935 million kilowatts. From April to June 2019 alone, Vietnam had more than 80 photovoltaic power generation projects connected to the grid, with a total installed capacity of 4.46 million kilowatts, accounting for nearly 10% of the total installed power generation capacity. Vietnamese media pointed out that the target of 4 million kilowatts of photovoltaic installed capacity had been achieved 5 years in advance. 

However, as new projects were put together and put into operation in the central and southern regions of Vietnam, the problem broke out and the electricity authorities were caught off guard. On the one hand, a large number of projects have been put into operation before the deadline for fixed electricity prices, and blowout power generation has caused a serious overload of the power grid. Some new production projects are faced with the dilemma of power transmission. On the other hand, in order to promote economic growth, local governments continue to approve new photovoltaic power generation projects, which has led to a continuous increase in production capacity. 

To solve these problems, the Vietnamese government had to take steps to cool the industry. Recently, the new photovoltaic power generation subsidy policy drafted by the Ministry of Industry and Trade has attracted local attention. The new photovoltaic power generation price is divided into 7.09 cents, 7.69 cents and 8.38 cents per kWh. This subsidy price is 10% to 24% lower than before. The Vietnamese government hopes to use the price lever to cool down the photovoltaic power generation projects under construction or proposed everywhere. It is reported that this policy only applies to photovoltaic power plant projects that have not been connected to the grid. Projects that have previously been connected to the grid are still purchased at the original electricity price. 

At the end of last year, the Ministry of Industry and Trade of Vietnam requested that all regions suspend the approval of photovoltaic power generation projects under the feed-in tariff scheme. At the same time, in areas where photovoltaic projects are concentrated, new infrastructures such as power grids are newly built or transformed to improve power transmission capacity. The latest reduction of electricity prices for photovoltaic power generation companies is also one of the measures. 

Currently, thermal power and hydropower account for about 70% of Vietnam's power supply. However, Vietnam has changed from a coal exporter to a net importer of coal. It is not optimistic to develop thermal power, and hydropower resources have been fully developed. The Vietnamese government guides the energy transition through policy support, which is in line with the global energy development trend. However, during the transformation process, due to the asynchronous construction of power transmission and transformation facilities in various localities, many photovoltaic power generation projects face the embarrassing situation of limiting production as soon as they are put into production. 

Editor: Carrie Wong / WSL Solar 

WSL Solar has been a quality and professional manufacturer of custom solar panel and solar solution provider in China since 2006. 

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