On April 3, the Vietnamese government is currently reviewing its feed-in tariff (FIT) policy, a move that has attracted great attention from the renewable energy industry.
Developers have expressed concerns that this will lead to serious economic consequences.
Stakeholders in the industry have submitted opinions to the National Assembly, claiming that state-owned enterprises have failed to fulfill contractual agreements.
They believe that if the policy changes continue, 173 solar and wind projects will face the risk of bankruptcy or exiting the market.
Last year, a government investigation revealed errors in the calculation of feed-in tariffs, especially in Ninh Thuan province, where some solar projects received non-compliant electricity prices. This discovery has brought an additional financial burden of 1.48 trillion VND (about 57.7 million US dollars) to the Electricity of Vietnam (EVN). As a result, the Ministry of Industry and Trade (MOIT) has been instructed to modify and correct the affected projects. But the sharp reduction in feed-in tariffs poses a threat to industry stability.
Under Vietnam's current policy framework, solar projects must be approved by the Prime Minister and included in the National Power Development Plan (PDP8) to enjoy a 20-year preferential feed-in tariff of 9.35 cents per kilowatt-hour.
However, the MOIT extended these eligibility criteria to provincial and regional projects, resulting in incorrect feed-in tariff allocations for 173 solar and wind projects, some of which had already been approved. EVN is now trying to recover the overpayments, a move that has sparked a backlash from the industry.
Under the revised policy, the FIT rates for affected projects will drop from 9.35 cents to 7.09 cents per kilowatt-hour, a reduction of 24% to 47%. The change affects more than 3,600MWp of solar power and 160MW of wind power, putting foreign investors at risk of financial losses.
