On 12 April 2019, Ministry of Industry and Trade of Vietnam (“MOIT”) published a new draft of the decision on the mechanism for encouraging the development of solar power projects in Vietnam (“Draft Decision 03”) which provides several significant changes, including the adjusted Feed-in-Tariff (“FiT”) compared to the old Decision No. 11/2017/QD-TTg on mechanism for encouraging the development of solar power projects in Vietnam (“Decision 11”). The Draft Decision 03 is expected to be promulgated on 1 July 2019.

Unlike the current fixed FiT of 9.35 US cents per KWh as regulated by Decision 11, the new FiT depends on the type and location of the solar project. The Draft Decision 03 proposes 4 different irradiance regions. Provinces with higher solar irradiance in Region IV will have a lower FiT than other provinces (see the schedule below). Region IV’s FiT includes mostly the southern and central provinces of Vietnam such as Ninh Thuan and Binh Thuan, which have the greatest potential in the solar energy sector.

The new lower FiT will not concern Ninh Thuan because it may enjoy the FiT specified in Decision 11 until the end of 2020 for projects on solar power and connection infrastructure with the design capacity of 2,000MW approved by the Prime Minister pursuant to Resolution No. 115/NQ-CP dated 31 August, 2018 on the implementation of a number of special policies on provision of assistance for Ninh Thuan province in socio-economic development settlement of business and people’s lives during 2018-2023. Therefore, the investors are currently rushing to set up their solar energy projects in Ninh Thuan. With nearly 100 solar projects announcing the commercial operation date before 30 June 2019, Ninh Thuan province intends to become Vietnam’s solar energy center.

After two years of boosting the solar energy sector development with Decision 11, the MOIT plans to apply a long-term policy to sustainably exploit the great potential of solar power in Vietnam through adjusting the FiT, as well as consolidating the mechanism for encouraging foreign and domestic investors.

Irradiance regional classification

Region I FiT: comprises 28 northern provinces of Vietnam, including: Ha Giang, Bac Kan, Cao Bang, Tuyen Quang, Thai Nguyen, Lao Cai, Yen Bai, Lang Son, Quang Ninh, Phu Tho, Vinh Phuc, Bac Giang, Hai Duong, Hoa Binh, Hanoi, Ha Nam, Bac Ninh, Hung Yen, Hai Phong, Ninh Binh, Thai Binh, Ha Tinh, Nam Dinh, Quang Binh, Thanh Hoa, Lai Chau, Nghe An, and Son La;

Region II FiT: comprises 6 central provinces of Vietnam, including: Quang Tri, Dien Bien, Thua Thien Hue, Quang Nam, Da Nang, and Quang Ngai;

Region III FiT: comprises 23 central highlands and southern provinces of Vietnam, including: Kon Tum, Ca Mau, Hau Giang, Binh Dinh, Bac Lieu, Kien Giang, Soc Trang, Can Tho, Vinh Long, Tra Vinh, Lam Dong, Ben Tre, Tien Giang, An Giang, Dak Nong, Ho Chi Minh City, Dong Nai, Dong Thap, Ba Ria – Vung Tau, Long An, Binh Duong, Binh Phuoc and Tay Ninh;

Region IV FiT: comprises 6 central highlands and southern provinces of Vietnam, including: Phu Yen, Gia Lai, Dak Lak, Khanh Hoa, Ninh Thuan, and Binh Thuan.


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