Vietnam’s solar industry has experienced remarkable growth in recent years, positioning the country as a leader in renewable energy adoption in Southeast Asia. This article explores the current state of Vietnam’s solar industry, the factors driving its expansion, and the projections for its future development.

Current State of Vietnam’s Solar Industry

The Vietnamese solar sector has witnessed exponential growth over the past decade. As of 2024, the country’s installed solar capacity has reached impressive levels, showcasing a commitment to clean energy transition.

• Installed Capacity in 2024: As of 2024, Vietnam’s installed solar power capacity is approximately 16.5 GW. This capacity represents a significant increase over previous years due to both domestic and foreign investment in renewable energy projects.
• Growth Rate: Since 2020, Vietnam’s solar industry has grown at an average annual rate of around 25%. This impressive growth is driven by favorable government policies, international support, and incentives such as feed-in tariffs, particularly for rooftop solar installations.
• Market Share: Solar power constitutes about 25% of Vietnam’s total power generation capacity. In the broader energy mix, renewables (including hydro) account for approximately 42%, while solar and wind together contribute around 13% of the country’s electricity generation.

Major players in the market include domestic companies like Trung Nam Group and BIM Group, as well as international investors such as Thailand’s B.Grimm Power and Japan’s Sharp Corporation. Notable project includes over 600 MW Dau Tieng Solar Power Complex in Tay Ninh Province and the 450 MW Trung Nam Solar Power Plant in Ninh Thuan Province.

Factors Driving Growth

1. Government Policies and Incentives

The Vietnamese government has implemented several policies to promote solar energy development:

• Feed-in Tariffs (FiT): Attractive rates for solar power producers
• Tax incentives: Reduced corporate income tax for renewable energy projects
• Land use benefits: Prioritized land allocation for solar installations

2. Decreasing Costs of Solar Technology

The global trend of declining solar panel and equipment costs has made solar energy increasingly competitive with traditional power sources in Vietnam. The levelized cost of electricity (LCOE) for solar projects in Vietnam has decreased by over 50% since 2018.

3. Increasing Energy Demand

Vietnam’s rapid economic growth has led to a surge in energy demand, with electricity consumption increasing by an average of 10% annually. Solar power has emerged as a quick and sustainable solution to meet this growing demand.

Challenges and Opportunities

Challenges:

• Grid infrastructure limitations: The rapid growth of solar capacity has strained Vietnam’s existing power grid, leading to curtailment issues in some provinces.
• Land availability: Finding suitable land for large-scale solar projects is becoming increasingly challenging, particularly in densely populated areas.

Opportunities:

• Rooftop solar: The residential and commercial rooftop solar segment presents significant growth potential, with government support through net metering policies.
• Floating solar farms: Vietnam’s numerous lakes and reservoirs offer opportunities for floating solar installations, maximizing land use efficiency.

Future Projections

The outlook for Vietnam’s solar industry remains highly positive:

• Capacity growth: Projected to reach 168,594 – 189,294 MW by 2050, with a 2030 target of 12,836 MW according to the government’s latest Power Development Plan.
• Investment forecast: Vietnam would require around US$10 billion annually between now and 2030 to keep pace with the growing demand
• Job creation: The solar sector is anticipated to generate more than 25,000 new jobs by 2050

Vietnam’s commitment to renewable energy, coupled with its favorable geographic conditions for solar power, positions the country to become a regional leader in solar energy production. Therefore, the industry’s growth is expected to significantly contribute to Vietnam’s energy security, economic development, and environmental sustainability goals.

Conclusion

Vietnam’s solar industry has grown significantly due to government support, lower technology costs, and higher energy demand. Challenges like grid infrastructure and land availability remain, but rooftop and floating solar offer exciting opportunities.

With abundant solar resources, Vietnam is set to meet its renewable energy goals and lead in sustainable development. The solar industry boosts energy independence and contributes to global climate change efforts.

Vietnam’s solar sector presents rich opportunities for investors, policymakers, and professionals. Staying informed about trends can help shape a sustainable energy future for the nation and region.

Harley Miller Law Firm “HMLF”

Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.

Phone: +84 937215585

Website: hmlf.vn

Email: miller@hmlf.vn