On 19 September 2019, the Ministry of Industry and Trade of Vietnam (“MOIT”) submitted to the Government the final draft decision of the Prime Minister on the mechanism for encouraging the development of solar power projects in Vietnam from 1 July 2019 to 31 December 2021 (“FIT2”). It is expected that the new solar FiT2 decision will be issued soon this month.
Notably, the final FiT2 draft aims mostly at encouraging solar power project development in southern area as the MOIT estimated an addition capacity of approx. 6-8 GW need to be realized to satisfy major power demand of this area up to 2021.
New FITs for Solar Power Projects – from 1 July 2019 to 31 December 2021
Compared to the previous drafts, the final FIT2 draft does not determine FiT prices based on regions but only on technology types. The final FIT2 draft classified solar power projects into three groups as follows:
• Ground-mounted solar energy project: VND 1,620/kWh (USD 7.09 cent/kWh); • Floating solar energy project: VND 1,758/kWh (USD 7.69 cent/kWh) • Rooftop solar energy project: VND 2,156/kWh (USD 9.35 cent/kWh)
The above FIT2 price shall be applied for solar power projects reaching COD within the period from 1 July 2019 to 31 December 2021 and applied for 20 years from the COD date. For Ninh Thuan province, solar power projects that reach COD before 1 January 2021 (within the capacity of 2,000 MW as already approved by the Government) still enjoy the FIT price of 9.35 cent/kWh.