Rooftop solar investors unhappy as government to stop buying surplus

Tung of Ho Chi Minh City spent VND50 million (US$2,000) in 2020 to install a rooftop system that can generate 5 kilowatt-peak (5 kilowatts of power in bright sunshine), and hoped to sell the surplus power to Vietnam Electricity (EVN) at the incentive price of 8.3 U.S. cents per kilowatt-hour.

But due to the Covid-19 pandemic, he failed to connect his system to the grid before Dec. 30, 2020, the deadline for the incentive price.

Now the Ministry of Industry and Trade is set to bury Tung and thousands of other investors’ hopes of getting paid for their electricity.

A proposed decree is set to say individuals’ rooftop solar systems can connect with the grid but EVN will not pay them anything for their electricity.

They are not allowed to sell to any other buyer either.

Analysts warn that this policy will discourage people from investing in clean energy.

"When people invest they expect to recoup their investment," Ngoc Duc Lam, former deputy head of the ministry’s Institute of Energy, said.

The Electricity Law requires any person or business selling even 1 kilowatt of electricity to the government must acquire a license and report their revenues to the government.

Lam said the scheme is unreasonable and needs to be changed.

As of July only 1,000 rooftop solar systems had been connected to the grid with a combined capacity of 400 megawatts.

But the number of people who have installed them – without yet connecting to the gris -- is much higher.

In HCMC alone there are over 14,000 rooftop solar systems with a combined capacity of 354 megawatts, and they generate 901 million kWh, triple their owners’ household requirement.

Businesses are hopeful the government will create a payment mechanism that encourages them to go green.

An executive at a garment company with 2,000 workers in southern Vietnam said without a clear policy to support rooftop solar installment, such as tax or cost incentives, it is very difficult for businesses to make the transition from fossil fuels to renewable energy.

The industry ministry has in response advised people to only install enough rooftop solar capacity for their own use to avoid "wastage."

It said the Power Development Plan 8 prioritizes rooftop solar for personal use rather than connection to the grid.

Tung has now given up all hopes of connecting with the grid. His system produces 20 kWh a day and has reduced his electricity bill by 70%.

The surplus produced during the day is stored in a batter for use at night.

Quang Vu in Hanoi’s Long Bien District has a system that generates 600 kWh a month, but he only uses half of that and sends the remaining to the grid for free.

"The proposed policy will not encourage renewable energy development. No one will invest in rooftop solar anymore if they see only losses from their investment."