Rooftop solar encouragement to come via policies

November 30, 2023 | 16:21
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The Vietnamese government has been requested to issue a decree encouraging rooftop solar development, with implementation of unlimited capacity requirements contingent upon advances in storage tech and investment initiatives.
Rooftop solar encouragement to come via policies
Rooftop solar encouragement to come via policies, illustration photo/ Source:

Policy restrictions that affect businesses’ energy autonomy strategies are impeding the use of rooftop solar energy, which has the potential to reduce power outages during the summer of 2024.

On November 6 at a National Assembly (NA) Q&A session, Nguyen Hong Dien, Minister of Industry and Trade, stated that the government has been asked to issue a decree encouraging the development of rooftop solar. When the government adopts a policy permitting the formulation of a decree in accordance with the Ministry of Justice’s recommendations, his ministry (MoIT) will execute the decree in accordance with the prescribed procedure, he said.

“At present, the MoIT is also actively advocating for the implementation of a direct electricity trading mechanism as a governmental proposal. The expansion of limitless rooftop solar capacity can only occur when storage technology evolves and puts little strain on the power transmission system,” he said.

Vietnamese power source development is a top priority, according to Minister Dien. Currently, the aggregate installed capacity of renewable energy power sources (excluding hydropower) has comprised 28.5 per cent of the overall capacity of power sources.

“This is an extremely high percentage; even in developed nations with advanced energy storage devices, clever grid systems, and technology, this percentage is only around 20 per cent,” Dien said.

Le Tat Hieu, a NA deputy representing the northern province of Vinh Phuc at the NA, also requested that the MoIT publicly declare intentions to issue regulations regarding the development of solar and rooftop power. “The Power Development Plan VIII (PDP8) places emphasis on the advancement of limitless solar power capacity on residential and commercial rooftops, contingent upon the utilisation of the existing power infrastructure and cost-effectiveness,” Hieu said.

The objective is to achieve a capacity of 2,600MW by 2030, he added. “The PDP8 has specifically established the objective of having 50 per cent of office buildings and households utilise self-produced and self-consumed rooftop solar power by 2030 for on-site consumption only, not for sale to the national grid,” he added.

Finance is also a primary challenge in applying renewable energy and green energy, according to Vu Duc Giang, president of the Vietnam Textile and Apparel Association.

“This is due to the fact that not all businesses can afford to invest simultaneously in development in the production process, and not all banks are willing to offer capital for companies to devote to this field,” he said.

Due to pressure from export markets, a high number of apparel companies have invested in green production. An increasing number of apparel companies are apprehensive about investing in rooftop solar power systems, despite the relatively short return period of 5-6 years. However, capital recovery for a business is an extremely difficult task.

“By utilising renewable energy sources, primarily rooftop solar power, organisations can proactively procure electricity for production, reduce expenses, generate environmentally friendly certifications for their products, and increase their global competitiveness,” Giang explained.

According to him, management agencies should also contemplate a strategy for transferring surplus electricity to the grid system in order to generate income for companies that install renewable and green energy. This would enable the companies to decrease expenses and enhance the competitiveness of their products.

While Vietnam intends to establish a competitive electricity market across all three tiers of wholesale power, retail electricity, and competitive electricity generation, more must be done to assist businesses.

Hoang Quang Phong, vice president of the Vietnam Chamber of Commerce and Industry, stated, “Many businesses are still perplexed, hesitant to invest in installation, and uninformed regarding investment and development due to the absence of precise regulations and installation and investment guidelines for the self-use model,” Phong said. “Therefore, we believe that businesses installing rooftop solar power systems require the assistance of a comprehensive solution package.”

This would include promoting the encouragement of self-consumed, off-grid solar power investment activities, with a focus on the development of various types of electricity storage equipment and research and development of smart power grids, he said.

“Accelerating the construction of a direct electricity trading mechanism and promoting a competitive electricity market at all three levels are also essential within the framework of Vietnam’s existing technological infrastructure,” Phong added.

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