On 22 October 2024, the long-awaited Decree No. 135/2024/ND-CP regulating policies and mechanisms to encourage the development of self-production and self-consumption rooftop solar power ("Decree 135") was finally issued by the Government. At a glance, Decree 135 offers more favorable provisions to rooftop solar ("RTS") system developers compared to its latest draft. We would like to point out the key notes of Decree 135 as follows:
1. Self-production and self-consumption under Decree 135: Mechanisms and policies under Decree 135 are provided for the development of self-production and self-consumption RTS power installed on the roofs of various constructions including individual residences, offices, industrial zones, clusters, export processing zones, high-tech parks, economic zones, production facilities, and business establishment. Self-production and self-consumption RTS power, according to Decree 135, refers to electricity produced and consumed by an organization or individual to meet their demands.
2. Principles for Development of self-production and self-consumption RTS power systems:
" The implementation of the construction and project development must be in compliance with all applicable regulations on investment, construction, land, environment, safey, firefightigin and prevention;
" During the RTS power system's investment and construction phase, imported and used solar panels and DC-to-AC converters are strictly prohibited.
3. Regulated violations:
" Developing self-production and self-consumption RTS power systems not in line with Decree 135;
" Developing, installing and operating the self-production and self-consumption grid-connected RTS power systems with a capacity exceeding the notified/registered capacity approved by a competent authority;
" Failing to comply with dispactch orders given by the competent authority.
It is worth noting that, in the latest draft, using regulations for encouragement of self-production and self-consumption RTS power systems to trade or sell electricity for other organizations/individuals is a violations. However, such a provision is not provided in Decree 135.
4. Models: According to Decree 135, developers of self-production and self-consumption RTS power systems can opt to either connect or not to connect their RTS power system to the grid. In the case of connection to the grid, no more than 20% of the RTS power system's installed capacity may be sold to Vietnam Electricity (EVN) in exchange for the surplus power produced. Depending on whether or not they are connected to the national power grid and whether or not they have extra power production that they may sell to EVN, RTS power systems must meet a variety of standards as set out in Decree 135.
5. Mechanism for RTS power system not being connected to the grid: RTS power system in this case is not subject to the requirement of the electricity operation permit and is able to be developed without any limitation regarding its capacity. Prior to installation, the developer must inform the relevant power units and the provincial Department of Industry and Trade (DOIT) of the RTS power system's installed capacity and location. They must also notify the provincial authorities responsible for construction, fire safety, and firefighting of the RTS power system's installation.
6. Grid-connected RTS power system:
" RTS power systems with a capacity of less than 100kW: Developers must notify the DOIT and local construction and fire prevention and firefighting competent authorities. Developers can choose whether surplus electricity is imported into the national grid. A zero-export device must be installed if surplus electricity is not fed into the national grid.
" RTS power systems with a capacity from 100 kW to under 1,000 kW: Apart from the procedures as set out for RTS power system being less than 100kW, developers must further notify EVN and may sell the surplus electricity of no more than 20% of its actual installed capacity if the capacity has not exceeded the total capacity allocated to its local province/city under the national power development plan and its detailed implementation plan.
" RTS power systems with a capacity of 1,000 kW or more: Developers must register with the DOIT to obtain the development registration certificate. The electricity operation permit is required if the developers sell the surplus electricity to the grid. When the total capacity exceeds the capacity allocated to such province/city under the national power development plan and its detailed implementation plan, the developer must additionally follow the regulated procedure for supplementing its project to the national power planning. A zero-export device must be installed if surplus electricity is not fed into the national grid.
7. Batter energy storage system ("BESS"): According to Decree 135, installing BESS is advised for developers in order to guarantee reliable and secure power system operations.
Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
