Investments in Vietnamese Solar continue to rise before 2019 deadline

Domestic and international investments in Vietnamese solar energy projects are racing to begin their operations before June 30, 2019, in order to qualify for incentives offered by the government.

Many companies have entered the solar industry after Vietnam’s Prime Minister, Nguyen Xuan Phuc, issued a decision in 2017 to encourage the development of the sector. A key provision of the governments support is that it will buy power from solar operators at a guaranteed rate of 9.3 cents/kWh (2,086 VND) for 20 years, which guarantees project profitability, for those projects that come online by June 2019.

In addition solar project operators who enter into agreements with Vietnam Electricity Corporation before the June deadline will also receive incentives related to capital, corporate taxes, equipment and land. The government has said that it will not guarantee the purchase price for energy from solar plants that come online after the deadline and that prices can change. 

According to Vietnam’s Ministry of Industry and Trade’s, there were more than 100 major solar energy projects that were licensed by the end of June 2018. These projects are expected to provide 4.7 GW of energy by 2020. In encouraging solar projects, the government is actively working with five key locations that are seen as the best locations in the country for solar projects. 

These locations are Binh Thuan and Ninh Thuan in the center of Vietnam, Dak Lak province in the central highlands and Long an and Tay Ninh provinces in the south. An “ideal” location is one that has low amounts of rain throughout the year and that provides at least 10 hours of sunlight per day for at least 250 days within a 1-year period. In Ninh Thuan, there are estimated to be 2,800 hours of sunlight per year so its one of the most desired locations. 

Truong Xuan Vy, Deputy Director of the Ninh Thuan Department of Planning and Investment in a press interview said that the province has given business and investment licenses to companies for 15 wind power projects and 27 solar power projects. Once all 42 projects are online, they will generate 800 MW and over 1,800 MW of energy respectively.

Dak Lak province in the central highlands is also seeing a surge on solar energy projects and in May 2018 approved 18 investors who will be creating four new solar projects. Based upon current projects, there will be 12 ~ 13 projects online by 2020 that will generate 1,980 MW of energy and 30 projects will be online by 2030 with capacity of 9,800 MW. 

Tay Ninh province, in the south of Vietnam has also approved renewable energy projects, including the Dau Tieng 1 and Dau Tieng 2 solar plants that had their groundbreaking ceremonies in June. When these plants come online they will be the largest solar power projects in Vietnam. Dau Tieng 1 is expected to come online in 2018 with a 150 MW capacity and the Dau Tieng 2 will come online in 2019 with an additional 200 MW of energy. An additional plant, Dau Tieng 3 with 150 MW of capacity is expected to come online by 2025 and by that time the province expects total solar power, from all operators, to exceed 1,500 MW.

Vietnam is one of the world’s best countries for sunlight and the country is keen to maximize investments into the renewable energy sector in order to create a sustainable energy future. Multiple studies have shown that its in the best interests of the country to lessen its reliance on coal-powered energy plants which are harmful to the environment and economy, since the government has to import coal. 

The national renewable energy development strategy for 2030 calls for solar power to expand from 10 million kWh in 2015, to 1.4 billion kWh in 2020 and 35.4 billion kWh in 2030. Renewable energy investors are hopeful that if the dozens of projects that are expected to be online by June 2019 come online on time and with few technical problems, that the government will extend its current renewable energy investment policies and that both solar and wind projects will be expanded and that Vietnam will become one of the world’s leading solar energy countries.