Unlocking Solar Power for 14 Million Households: Vietnam’s Ambitious Plan and the $4.2 Billion Question

The total direct support for households can amount to up to VND 42 trillion. These policies are proposed by the Ministry of Industry and Trade in the 3rd draft of the Decision of the Prime Minister on policies to support households in installing rooftop solar power systems for self-generation and consumption, and energy storage systems.

Previously, in the 2nd draft, the Ministry of Industry and Trade proposed a support of up to VND 500,000 per kWp of installed capacity for households investing in rooftop solar power systems, with a limit of VND 2.5 million per household. The proposed implementation period was until January 1, 2031.

Households were also expected to receive support in the form of subsidized interest rates on commercial loans for investing in these energy systems.

However, many opinions suggested clarifying the feasibility of the support level. The Ministry of Finance, citing data from the draft dossier, stated that the investment cost for a rooftop solar power system is about VND 12-15 million/kWp, equivalent to VND 60-150 million for a 5-10 kWp system. The payback period is expected to be around five years.

Therefore, the direct support level of VND 500,000/kWp (not exceeding VND 2.5 million per household) as initially proposed lacks a clear basis for calculation.

The Ministry of Justice also advised considering the form of direct investment support during the installation process of household solar power systems. They cautioned that direct support of VND 500,000/kWp, if implemented on a large scale, would pose challenges in budget balancing and potentially lead to wasteful and inefficient spending.

Meanwhile, the Ministry of Science and Technology argued that if implemented on a large scale (for example, developing 50 GWp of self-produced and self-consumed solar power as directed), the direct investment support of VND 500,000/kWp would require a substantial amount of state budget, estimated at about VND 25 trillion.

This expenditure poses significant challenges in budget balancing and carries the risk of wasteful spending and financial losses during the management and disbursement process.

In response to these opinions, the Ministry of Industry and Trade made adjustments in the 3rd draft.

The 3rd draft proposes a support of VND 1-1.5 million for the installation of rooftop solar power systems and an additional VND 1-1.5 million for the installation of accompanying energy storage systems (BESS) with a minimum capacity requirement. It also suggests a support of VND 4 million/kWp for investing in solar power systems up to 5 kWp and a minimum of VND 2 million/kWh for investing in BESS up to 10 kWh.

With approximately 28 million households nationwide, to achieve the goal of 50% of households installing rooftop solar power systems for self-generation and consumption as per the adjusted Power Development Plan VIII, the total direct support for the 2025-2030 period could reach VND 42 trillion. On average, each province would need to spend about VND 250 billion per year, according to the Ministry of Industry and Trade. They emphasized that this amount is not excessive compared to local budgets and will be balanced and allocated by the Ministry of Finance in the annual estimates of the provinces.

“However, the support amount is maximum, and the actual support depends on the local budget conditions and the installation needs of the households,” the Ministry of Industry and Trade stated, adding that this regulation applies equally to all households to ensure fairness.

In terms of effectiveness, if each household installs an average of about 3 kWp, the annual electricity production can reach more than 50 billion kWh, equivalent to 16% of the country’s electricity demand in 2024.