MoIT advises caution over residential solar systems

In a statement on May 1, MoIT stated, "Non-self-sustaining, grid-connected home solar systems will incur operational costs and are not advisable."

Under the proposed regulations, off-grid residential solar installations would face no development limits. However, for grid-connected systems, homeowners may feed surplus energy back to the grid but would receive no financial return. The cap for such installations is set at 2,600MW, aligned with the National Power Development Plan VIII.

According to Vnexpress, many industry experts are critical of these measures as they believe they lack adequate incentives for investment, pointing to the zero-return policy as economically unviable.

Additionally, the Electricity Regulatory Authority of Vietnam issued a warning on April 30 about rooftop solar. The authority advised prioritising on-site consumption and limiting grid feed-in to avoid large-scale disruptions and unnecessary financial burdens.

"Rapid, large-scale adoption could significantly destabilise the system and generate unwarranted costs," according to the regulator.

Currently, rooftop solar constitutes over 9 per cent of Vietnam’s total installed capacity, approximately 7,660MW, and nearly 4 per cent of national electricity production. This surpasses other renewable sources like wind and biomass, and even small hydro and gas turbines, which previously dominated the energy mix.

The variable nature of solar power, dependent on weather conditions, requires substantial backup and storage solutions to ensure grid stability, adding extra costs for homeowners and the electricity sector. On a larger scale, alternatives include pumped hydro storage or traditional power sources like hydro and gas, which face intermittent operation due to solar instability.

Regulators also highlight the challenge of managing the excess capacity from solar during peak times, which could surpass the grid’s absorption capacity. Grid operators would then face a critical choice: reduce output from controllable traditional plants, risking system reliability, or cut renewable energy production, thereby increasing operational costs and wasting resources.

The small-scale and dispersed nature of residential solar also complicates data collection and system control, presenting significant challenges in balancing the grid, particularly for individual household systems where precise data collection is not feasible.

Finally, the MoIT underscored the economic impact of solar intermittency. The variability of renewable sources necessitates keeping traditional power on standby or at low output, incurring costs even when no power is generated. These costs are ultimately distributed across all customers, including those without renewable installations.

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