The Ministry of Industry and Trade issued Circular No. 16/2017/TT-BCT (Circular 16) dated September 12, 2017 regulating the development of grid connected solar power projects, rooftop solar power projects and standard contract for power purchase and sale from rooftop solar power projects in Viet Nam (“Circular 16”).

Question: What are the key points as stipulated in Circular 16?


Power of Viet Nam Group (EVN) has a monopoly over power purchase Circular 16 stipulates that the Power Buyer must be the Power of Viet Nam Group or its authorized member unit and the Power Seller is an organization or individual licensed to conduct power related activities in the area of power generation from grid connected solar power plants; organizations and individuals that develop rooftop solar power projects and sell surplus power to the Buyer.

Requirements for grid connected solar power projects and rooftop solar power projects Pursuant to Circular 16, grid connected solar power projects and rooftop solar power projects with the scale of a capacity equal to or greater than 01 (one) MW must be licensed for power related activities and comply with Circular No.12/2017/TT-BCT dated July 31, 2017 of the Ministry of Industry and Trade.

For grid connected solar power projects, the Investors are only eligible to formulate projects within the approved national and provincial-level solar power development planning. At the same time, such projects must ensure that the equity capital ratio must not be less than 20% of the total investment and the area of long-term land use must not exceed 1.2 ha/MWp.

For rooftop solar power projects, the Investor must provide project information such as expected capacity, specifications of solar panels and parameters of AC converters for the purpose of registering a connection. At the same time, in order to ensure the safety of the grid system, DC converters must have an anti-islanding function when the power grid is out of power and meet the statutory voltage and frequency standards.

For projects with a capacity of 1 MW or more, the Investor will have to complete the procedures for supplementing the solar power development planning and the power development planning in accordance with law.

Concerning power price of a solar power project: For grid connected projects, the Power Buyer will have to buy all power turnout from the grid connected projects with a power purchase price of VND2,086/kWh (exclusive of value added tax) at the place of delivery. Power sale prices are adjusted by the fluctuation of the VND/USD exchange rate.

This price applies only to grid connected projects with a solar cell efficiency greater than 16% or module efficiency greater than 15%. For rooftop solar power projects, the power purchase price at the place of delivery (excluding value added tax) is VND2,086/kWh. The power price for the following year will be adjusted according to the central exchange rates of VND/USD announced by the State Bank of Vietnam on the last working day of the preceding year. The said power purchase prices apply only to part of the power plant coming into commercial operation before June 30, 2019 and will be applied for 20 years as from the date of commercial operation. Concerning the standard power purchase and sale contract for solar power projects./.