Vietnam is swiftly becoming an enticing prospect for investors keen on tapping into the potential of distributed solar energy. The government’s proactive stance, advocating for rooftop solar installations in both residential and industrial sectors, alongside ambitious targets for renewable energy, establishes Vietnam as a pivotal player in the global shift towards sustainable practices.
The imperative to tackle electricity shortages has driven Vietnam to emphasise the development of renewable energy sources. As the power sector experiences substantial growth, the demand for commercial electricity continues to rise.
Vietnam’s electricity production, standing at 93 billion kWh in 2011, surged to 215 billion kWh in 2020, showcasing a growth rate of 3.4 per cent in 2021. Forecasts predict an annual growth rate of 10 per cent from 2021 to 2030, aligning with the country’s rapid urbanisation and economic expansion, especially in the manufacturing sector.
Despite recent additions of utility-scale renewable energy sources, primarily concentrated in the central and southern regions, Vietnam grapples with challenges in meeting escalating power supply demands. The decline in hydroelectricity production, worsened by climate change impacts and El Niño challenges, underscores the urgent need for alternative energy sources.
Meanwhile, the global push for net-zero emissions compels international brands and manufacturers in Vietnam to shift towards renewable energy, opening ample opportunities for the distributed solar market. The advantages, such as minimal investment, swift installation, stability, and reduced impact on the national grid transmission, make distributed rooftop solar a potential solution.
As of the end of 2023, Vietnam’s total installed capacity reached 80,700 MW, with solar power constituting around 20.5 per cent, including over 9,000 MW from rooftop solar installations. The Power Development Plan VIII outlines ambitious targets for renewable energy, aiming for a share of 31-39 per cent in electricity production by 2030 and an impressive 67.5-71.5 per cent by 2050. The plan envisions a solar capacity of almost 20,600MW by 2030 and an astounding 189,000MW by 2050, significantly contributing to the country’s total electricity production.
In a bid to further encourage renewable energy adoption, the Vietnamese government actively promotes direct power purchase agreements (DPPAs). This initiative seeks to boost electricity demand and create an environment for businesses to directly procure power from renewable energy producers, fostering a sustainable energy ecosystem.
Vietnam’s commitment to renewable energy, especially distributed solar, presents a lucrative opportunity for investors. With the increasing demand for rooftop solar installations, ambitious government targets, and supportive policies like DPPAs, Vietnam emerges as an appealing market for those aiming to contribute to sustainable energy development.
As the world transitions towards cleaner energy sources, Vietnam stands as a beacon for investors seeking to capitalise on the growth of distributed solar energy in the Southeast Asian region.
Dieu Tuan
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