Vietnam issues new rules capping surplus solar sales to national grid

The Vietnamese government has issued Decree 135/2024/ND-CP, which puts a cap on the sale of excess solar power to the national grid, effective Oct. 22.

The rules are part of Vietnam's plan to promote renewable energy use and provide clear guidelines for self-consumed solar power installed in residences, offices, industrial parks, production facilities and economic and export processing zones.

Decree 135 enables solar power systems with an installation capacity of 1 MW or more to sell excess electricity to the national grid, provided it is limited to 20% of installed capacity and they obtain an operational license.

Individuals and organizations are exempt from obtaining the license if they are not connected to the national power grid, have anti-backflow equipment installed, or have rooftop systems with a capacity of less than 100 kW.

Some industry participants expressed concerns regarding the licensing requirement to sell surplus electricity.

"Decree 135 marks a significant step in promoting self-reliant, green energy production. Yet the thresholds like the 1 MW licensing requirement could serve as both a safeguard and a potential bottleneck," said Phu Nguyen, Asia Pacific conference manager at Terrapin.

Miguel Angel Ferrer, chief investment officer at VIoT Group, believes the capped surplus export model may hinder larger-scale rooftop solar adoption among commercial and industrial participants.

"Industrial and commercial sectors that could significantly drive renewable energy growth may find the 20% cap limiting, leading them to look for alternative markets or delay investments," he said.

Ferrer suggested the government revisit the cap in future policy updates.

"If Vietnam aims to keep pace with regional competitors and attract more significant renewable investments, flexibility in export limits and clearer pricing mechanisms will be critical. While the current pricing mechanism helps maintain market stability, it may hinder the growth of large-scale solar, which is crucial for the country’s broader renewable energy goals," he added.