Vietnam’s Decree 135: Unlocking Corporate Renewable Energy Through DPPA—Opportunities and Roadmap

Vietnam – October 2024 

Vietnam has unveiled a new decree aimed at boosting rooftop solar adoption in residential, commercial, and industrial sectors. The policy encourages self-generated, self-consumed power while exempting qualified installations from licensing requirements.

For the first time, businesses in Vietnam can buy clean electricity directly from independent power producers (IPPs), easing the financial burden on EVN (Vietnam Electricity). With global manufacturing giants like Samsung, Nike, and Intel pushing for 100% renewable energy under RE100 commitments, the mechanism is expected to attract foreign investment and foster a market-driven electricity sector. 

How Decree 135 Works? 

Vietnam’s rooftop solar potential is immense, with the country’s industrial zones presenting a key growth area. With 428 industrial parks and over 1,000 clusters hosting nearly 80,000 businesses, the capacity could exceed 140 GW. If each industrial park installs 50 MW, total capacity could reach 22 GW. A short three-year payback period makes rooftop solar an attractive investment, particularly for energy-intensive industries like textiles, footwear, and manufacturing.

The new regulations remove administrative hurdles, making it easier for businesses and households to install rooftop solar without reclassification of land use. Residential systems under 100 kW face no restrictions, while installations above 1,000 kW must align with national power planning guidelines. To encourage participation, the government offers tax incentives and simplified procedures.

Grid integration rules allow residential and small business systems under 100 kW to sell up to 20% of excess power to Vietnam Electricity (EVN), with compensation based on the previous year’s market price. However, government buildings are restricted from selling surplus electricity. The policy also encourages the use of Battery Energy Storage Systems (BESS) to enhance grid stability and optimize solar energy use.

Challenges and Future Prospects 

Despite the promising outlook, challenges remain. Some industrial zone operators prohibit grid connections, restricting businesses from fully utilizing rooftop solar. High installation costs, partly due to the requirement for designated contractors in industrial parks, also pose a barrier. Installation costs currently range from VND 7.5–8 billion per MWp, making initial investment a key concern.

Experts urge regulatory flexibility to allow businesses greater choice in contractor selection and improved grid access to maximize adoption. The push for energy storage is also critical. Vietnam has set a target of 300 MW of battery storage by 2030, though analysts suggest expanding this to better support renewable energy growth.

Strategically, Decree 135 aligns with Vietnam’s upcoming Renewable Energy Certificate (REC) and carbon credit market, set to launch in 2025, allowing businesses to verify and monetize their clean energy usage.