Rooftop solar power price is only 5.2 - 5.8 cents/kWh: Everyone benefits

Lao Dong newspaper March 2021 interview with Mr. Hoang Tien Dung, General Director of Department of Electricity and Renewable Energy (EREA) about the Ministry of Industry & Trade (MOIT) draft policy for solar feed-in-tariff (FIT3). 

This is a translation to the original interview in Vietnamese here: Giá điện mặt trời áp mái còn 5,2 – 5,8 cent/kWh: Ai cũng có lợi

Hoàng Tiến Dũng - Cục trưởng Cục Điện lực và Năng lượng tái tạo (EREA)

The above price is built on the basis of a foreign consulting agency researching and evaluating the change and development of renewable energy, the price of solar power equipment in Vietnam and around the world, ensuring the best benefits between the parties.

The Ministry of Industry and Trade is developing a draft related to the price mechanism for rooftop solar power with the price expected to decrease sharply and promulgate this March. Accordingly, the price of rooftop solar power is only 5.2 – 5.8 cents/kWh for each type of project capacity.

Regarding the draft new price for rooftop solar power, Lao Dong Newspaper had an exchange with Mr. Hoang Tien Dung – Director of the Department of Electricity and Renewable Energy.

Rooftop solar power price ensures harmonization of benefits

Lao Dong:

Sir, the draft offers a rather deep reduction compared to the current FIT price – will investors and households install and use rooftop solar energy?

Hoang Tien Dung

– In the recent time, the price of equipment for the installation of rooftop solar power has decreased rapidly, the panel efficiency is much higher and gives more electricity, so this price that has been consulted and evaluated is still effective for investor and for solar energy generation for sale to the electric grid.

As for investors – investing in rooftop solar power systems for consumption, this price is much cheaper than the electricity purchase price of Electricity of Vietnam (EVN).

The purpose is to develop in the right direction, which is to encourage people and businesses to install for their own use, instead of installing rooftop solar just to sell all solar energy to the national power grid and enjoy high prices.

Lao Dong:

As you say, this mechanism will encourage households to invest in the installation and use of rooftop solar power, what about “sharks” who want to invest in this field?

Hoang Tien Dung

– Solar power in general is encouraged to develop in the coming time. In the draft Power Plan VIII, the planning unit still expects that by 2030 there will be about 25,000-26,000 MW of solar power capacity, which means an increase of about 1,000 MW each year.

Lao Dong newspaper interview with Hoang Tien Dung Director of EREA

The Ministry of Industry and Trade is developing a draft related to the price mechanism for rooftop solar power with the price expected to decrease sharply and promulgate this March. Photo: EVN

Lao Dong:

What is the basis for setting the price of rooftop solar power at 5.2 – 5.8 cents/kWh, sir?

Hoang Tien Dung

The price level is built on the basis of a foreign consulting agency researching and assessing the change and development of renewable energy, the price of solar power equipment in Vietnam and in the world.

At the same time, based on calculations from investment costs, operating and repair costs of the electrical system, installation costs, including loan costs, connection costs and the life of the project within 20 years.

Lao Dong:

Is this price beneficial for investors or buyers?

Hoang Tien Dung

The price level is built on the basis of a foreign consulting agency researching and assessing the change and development of renewable energy, the price of solar power equipment in Vietnam and in the world.

At the same time, based on calculations from investment costs, operating and repair costs of the electrical system, installation costs, including loan costs, connection costs and the life of the project within 20 years.

Bidding for solar power will be applied

Lao Dong:

Given the view on the new price mechanism, one expert said, should switch to FiT 3 mechanism, in the direction of going down from 6.7 to 6.9 UScents/kWh, do you think, this price is feasible?

Hoang Tien Dung

– From an investor’s point of view… it’s very feasible. I think that this is a forecast, an expert opinion only, there is no specific calculation.

Lao Dong:

Sir, recently, Lao Dong Newspaper has published many articles related to the bidding mechanism for solar power projects. After that, the Government Office had a document conveying the opinion of the Prime Minister “assigning the Ministry of Industry and Trade to study, handle and implement”, on this issue, what is your opinion?

Hoang Tien Dung

– Except for rooftop solar power, which still applies the fixed price mechanism, floating solar power and terrestrial solar power will have to apply the bidding and investor selection mechanism.

We are researching, drafting, actually finished and waiting for experts and ministries to discuss, exchange and give opinions. The draft is expected to be published in the first half of this year.

Lao Dong:

– Thank you for sharing!

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