Amidst the global energy transition and the escalating demand for renewable energy, the development of rooftop solar power has become a pivotal trend to mitigate environmental harm. To foster and streamline the development of rooftop solar power, the Government promulgated Decree No. 135/2024/ND-CP ("Decree No. 135") on October 22, 2024, prescribing incentives for solar power generation by households, enterprises, and production establishments. This Decree not only bolsters national energy security but also galvanizes community engagement in environmental stewardship and sustainable development. In this article, ATA Legal Services will delve into the salient features of Decree No. 135 and its beneficial implications for the Vietnamese energy landscape.
1. A notification or registration must be filed with the competent state agency before proceeding with the installation of a rooftop solar power system.
- Organizations and individuals installing rooftop solar systems for self-consumption without grid connection: They must notify the local authorities, including the Department of Industry and Trade, the power company, and the construction and fire safety department, of the system's capacity and location for monitoring and management purposes.
- For rooftop solar photovoltaic systems that are self-generated and self-consumed, and are interconnected with the national power grid:
- For systems with an installed capacity under 100 kW: Submit a notification using Form No. 04 as per Decree No. 135 to the Department of Industry and Trade, the local electricity company, and the local construction and fire safety authorities for management, monitoring, and guidance in compliance with the law.
- Systems with an installed capacity ranging from 100 kW to less than 1,000 kW: (1) Submit a notification to the Department of Industry and Trade as per Form No. 04 attached to Decree No. 135, accompanied by the design documents; (2) Notify the local construction and fire prevention authority for management, monitoring, and compliance with legal regulations; (3) Inform the local power utility of the system for management, monitoring, and safe operation.
- Entities installing rooftop solar systems with a capacity of 1,000 kW or more for self-generation and self-consumption, and selling surplus electricity to the national grid are required to comply with electricity planning procedures and obtain a power generation license, as stipulated by law, unless they fall within the capacity scale specified in local planning and implementation plans.
2. Individuals and organizations installing rooftop solar power systems for their own use are permitted to sell any surplus electricity generated to the national grid.
On-grid rooftop solar systems for self-generation and self-consumption with a capacity as per the planning and implementation plan, and for individual households and houses with a capacity below 100 kW, can sell excess electricity to the national grid but not exceeding 20% of the actual installed capacity. Vietnam Electricity will purchase the excess electricity fed into the national grid from organizations and individuals at the average electricity market price of the previous year as announced by the system operator and electricity market.
To sell surplus electricity generated from rooftop solar panels, organizations and individuals must submit a request for electricity sale to sign a power purchase agreement. The buyer of surplus electricity shall sign the purchase agreement within 5 working days from the date of receipt of the seller's request. The term of the power purchase agreement is 5 years from the date the rooftop solar power system is put into operation.
For rooftop solar power systems that are self-generated and self-consumed, installed on the roofs of buildings that are public offices or properties identified as public assets, the sale of excess electricity is not permitted.
3. More policies and incentives for self-consumed rooftop solar power are regulated
Self-generated solar power for on-site consumption receives various benefits.
1. Organizations and individuals installing rooftop solar systems for self-generation and self-consumption are exempt from electricity business licenses and have no capacity limits in the following cases:
- Not connected to the national grid;
- Installation of a reverse power flow protection system into the national grid;
- Households and individual houses develop solar rooftop power for self-generation and consumption with a capacity of less than 100 kW.
2. Entitled to tax incentives as stipulated in the current tax laws.
3. Eligible for streamlined administrative procedures as prescribed by current specialized laws.
4. Buildings equipped with rooftop solar panels for self-generation and consumption are exempt from adjusting or supplementing their energy and functional land use plans as required by law.
5. Households and individual houses developing rooftop solar power for self-generation and consumption are exempt from or do not need to adjust their business licenses.
Notes:
Organizations or individuals currently selling electricity to the power utility for projects that have installed and operated power generation facilities before January 1, 2021, are not permitted to register for the installation of additional rooftop solar power for self-generation and self-consumption at the same electricity usage location.
Organizations and individuals that have developed rooftop solar power for self-generation and self-consumption since January 1, 2021, shall implement as follows:
- Households, individual houses, and government offices with rooftop solar systems that are grid-connected and self-consuming are required to submit relevant information to the competent authority for the issuance of a development certificate to record the system's size and location.
- Organizations and individuals who have installed rooftop solar panels for self-generation and consumption, and are connected to the national grid, shall send relevant information to the competent authority for the issuance of a development certificate to record the scale, location, and shall not sell surplus electricity.
The sale of surplus electricity must be conducted in accordance with the regulations stipulated in Decree No. 135.
Decree No. 135 takes effect from October 22, 2024.
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