Vietnam’s New Circular Provides Detailed Guidelines on Project Development and Model Power Purchase Agreements for Solar Projects

On 12 September 2017, the Ministry of Industry and Trade (MOIT) issued Circular No. 16 with 5 chapters and 22 articles, including detailed guidelines on the formulation and approval of national and provincial solar power development plans, technical requirements, and tariff structure for both grid-connected projects and rooftop projects. It also includes a set of three templates of model power purchase agreements for grid-connected projects, residential rooftop, and commercial/industrial rooftop projects/systems, including specific guidelines on the application of net-metering schemes for rooftop projects.

Accordingly, electricity from solar projects can be sold to Vietnam Electricity at the tariff of VND 2,086 per kWh (roughly Uscents9.35 per kWh) which can be adjusted in accordance with the VND-USD exchange rate fluctuation, compared to the minimum price of hydroelectricity of VND1,117 per kWh (roughly Uscents5.01 per kWh). This price will only be applied lớn the part of the solar power plant reaching commercial operation date before June 30, 2019 with 20-year term application.

Circular 16 clearly provides the technical requirements for grid-connected projects, including the minimum ratio of the equity owner’s capital of 20 per cent of the project’s total investment capital, the minimum land area used permanently of 1.2ha per one MWp and the connection with SCADA system or load dispatch information. Besides, rooftop projects must place different registration requirements, with the investors of rooftop projects having the capacity of less than 1MW registering an interconnection with the provincial-level electricity company/utility while investors of rooftop projects having the capacity of 1MWp or more conducting a procedure for inclusion of the project to the relevant power development plans.

Circular 16 issued and other favorable conditions including the preferences on corporate income tax, import tax and exemption from land use levy and land rental will promote investment in renewable energy projects in Vietnam, ensuring the sustainable development of Vietnam. 

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TheLEADER – Cơ quan báo chí của Hội các Nhà quản trị doanh nghiệp Việt Nam

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