RE-Talk Vietnam:
C&I Rooftop Solar Future

Why Do We Choose Vietnam?​

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- Basic Reasons:

• Large Electricity Demand: EVN aims to increase capacity of 6-7 GW per year to match demand, and plans to increase renewables energy mix to 21% by 2030. In addition, Vietnam is expected to exceed its 1GW rooftop target by 2025 comfortably.

• Under the COVID-19 Situation, Vietnam is one of the countries in Southeast Asia which the power of demand grows. Other three countries with positive power demand growth are Myanmar, Indonesia and Philippines.

• Still heavily rely on fossil fuel: 38% of total installed capacity are coal-fired power plants in North and Central as of 2018, and 18% of total installed capacity are gas-fired plants in the South.

- Political and financial Reasons:

• The new FIT is 8.38 US cents/kWh, a bit lower than the previous one, which is 9.35 US cents/kWh. It’s only available for projects commission due 31 December 2020. The tariff will last 20 years since commissioning. Even if with reduction of tariffs, solar power projects are still financially viable.

• The rooftop and ground mounted market in Vietnam is foreseeable since the schedule on regulation modification has been mapped out .

• The returns for C&I market in Vietnam are higher than other markets and PIRR can be from 9% to 13%.

The Requirements for Rooftop PV in Vietnam

• For PV rooftop system≥ 1MWp, the project are required to be added into the master plan, prepare specialized reports and obtain EVN operation licenses.

• For PV rooftop system ≤ 1MWp, developers need to work with provincial EVN to register the capacity of the plant, kinds of modules, inverters that complies with EVN grid codes.

• For PV rooftop system > 3kWp, it must be connected to 3-phase grids.

Responsibility of EVN:

• Supply and install for 2-way meters.

• Calculate for production at the end of the period.

• Instruct registration; collect the requested dossiers for PV rooftop project; provide the procedures of testing; sign PPA.

• Yearly payment

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Responsibility of Investor:

• Prepare requested dossiers.

• Comply with EVN grid codes.

• Together with EVN check energy production periodically in every level of low-mid-high electricity time.

Typical C&I Financing Strategy

• The first 5-10 MW of projects are usually financed full equity.

• Once the company has demonstrated sufficient track record and scalability, debt providers can be involved to finance a larger pipeline: typically, minimum USD 15-20 million worth of debt.

• Once the first 15 MW are built, we can start contemplating refinancing the operating portfolio with better terms

​Therefore, the optimal financing models for renewable energy projects in Vietnam is to finance with equity, and to refinance with debt.