In recent years, global PV barriers have come one after another, and the world PV product trade situation has become more complicated. Under the tariffs imposed by the United States, India and other countries, Vietnam, as the third place for photovoltaic tariff exemption, has low production costs such as manpower and electricity prices, and the export advantages of photovoltaic products in the global PV market are obvious.
The lighting conditions in Vietnam are quite good. It has a sunshine hours of 1600-2700, an average light of 4-5KWh/m2, and even higher than China's Class I resource area. The rich lighting conditions have become an important factor in Vietnam's PV investment.
At present, a number of domestic PV companies have set up production bases in Vietnam to avoid the impact of PV trade barriers while achieving cost reduction.
Power and photovoltaic development planning
With the development of Vietnam's economy and industrial modernization, Vietnam's demand for electricity is increasing year by year, and Vietnam's government actively supports the application of renewable energy. Vietnam plans to increase the share of renewable energy to 9.9% of its energy structure by 2020. It will increase to 21% in 2030.
Vietnam's electricity is mainly based on low-cost hydropower and coal-fired power, plus natural gas power generation, which accounts for about 90% of total power installed capacity. In 2018, renewable energy power generation accounts for 6% of total installed capacity.
In the Paris Agreement, Vietnam promised that by 2030, photovoltaic power generation will account for 20% of renewable energy generation. In the 2020-2030 PV installed capacity plan set by the Vietnamese government, it is planned that the installed capacity of photovoltaics will reach 4GW by 2025, and photovoltaic power generation has become an important way to meet the demand for electricity in Vietnam.
Market subsidy policy
In 2017, the Vietnamese government introduced the PV subsidy policy (No.11/2017/QD-TTg), which stipulates that the PV on-grid price is VND 2086 (approximately 9.35 US cents) per kilowatt-hour, and the electricity price effective date is 2019. On the 30th of the month, at the same time, the purchaser has the responsibility to purchase the grid-connected power in full at the price of 2086VND/KWh (about 9.35 cents/KWh).
Subsequently, the Vietnamese government successively released the draft tariff adjustment for the period from July 1, 2019 to June 30, 2021. The new FiT will propose different price levels according to the project location and technical solutions, and will be classified according to different irradiance areas, involving different PV power plant technical solutions (ground, floating, roof, energy storage systems).
In July 2019, the Ministry of Industry and Trade of Vietnam released the “Rooftop Photovoltaic Advancement Plan” (No. 2023/QD-BCT): It is planned to put into operation 1GW of rooftop photovoltaic (RTS) project in the country by the end of 2025, through the rooftop photovoltaic market. Develop a vision to achieve the 2050.
PV market project investment policy
Corporate income tax: The income of newly invested PV projects will be subject to corporate income tax at the rate of 10% for the first 15 years. In contrast, the minimum corporate income tax rate available to ordinary companies is 20%.
Import duties: The fixed assets used in the production and construction of photovoltaic projects are exempt from import duties, such as imported goods such as raw materials, manufacturing materials and photovoltaic modules.
Land costs: Investors have the right to waive 11 years of land use fees, if the investment project is located in an area facing extreme socio-economic difficulties for 15 years. In addition, during the construction of the project, investors have the right to exempt the land rent and water fee surface rent.
Although the Vietnamese PV industry has no restrictions on foreign ownership, PPP projects using the BOT model are more popular due to government guarantees and incentives. At this stage, investors still face many obstacles, including the lack of capital financing channels, the contradiction between low electricity prices and high investment costs brought by new technologies.
PV installation and demand forecast in Vietnam market
According to the Vietnam National Electric Power Regulatory Center, Vietnam’s photovoltaic projects connected to the grid before June 30, 2019 totaled 4,312 megawatts.
As of 2018, only 1,800 homes have installed rooftop photovoltaic systems with a total installed capacity of 30 MW.
The Vietnamese government aims to develop 850 MW of PV in 2020, and this goal is likely to be reached ahead of schedule in 2019. The follow-up goal of 4GW in 2025 may also be reached in advance in 2023.
Due to the abundant sunshine, the most potential development in central and southern Vietnam is mainly concentrated in Ninh Thuan (Ningshun), Binh Thuan (Pingshun), Daklak, Khanh Hoa and other regions. Among them, Ninh Thuan's PV feed-in tariff (2086VND/KWh) is connected to the end of 2020.
It is worth noting that in the next phase, the Vietnamese government plans to provide higher PV subsidies to the northern regions with weaker surface photovoltaic and photovoltaic resources, and parity is also the future development trend of Vietnam.
PV product price
According to the data released by the China Chamber of Commerce for Industry and Commerce in the first quarter of 2019, the demand for overseas emerging markets is strong due to the rapid decline in domestic PV prices. China's exports to the Vietnamese market were $0.14/W, down 37.23% year-on-year.
In the first quarter of 2019, Vietnam replaced India as the largest export market for component exports in China, and its component exports to Vietnam increased significantly by 239 times to 739 million US dollars, accounting for 16.8% of total exports. However, the average price of components in the Vietnamese market decreased by 41.2% year-on-year, and the unit price was US$0.29/W, which is still the highest export component price.
Future market trend assessment
Market risk
According to the Vietnam National Electric Power Regulatory Center, Vietnam’s photovoltaic projects connected to the grid before June 30, 2019 totaled 4,312 megawatts. At the end of June 2019, the National Electricity Regulatory Center of Vietnam conducted power generation allocation to power producers in the process of check-in and grid connection of 79 photovoltaic power plants with a total capacity of approximately 4,312 megawatts to avoid large-scale grid overload and high grid-connected capacity. Test the carrying capacity of the Vietnamese PV market.
The guidance document issued by the Vietnam Power Group in July showed that the rooftop photovoltaic project (RTSPP), which was put into operation after June 30, 2019, will not pay electricity charges until the new national policy is issued, which means that the new grid-connected project has no subsidies. risk.
market trend
According to the latest developments in Vietnam's PV policy, the government has a clear policy subsidy for the northern region, which is intended to promote the development of new energy projects in the north. At the same time, Vietnam's Ningchuan Province approved the extension of the FiT validity period of the photovoltaic project, which means that investors can enjoy the electricity price subsidy of 9.35 cents/kwh before the end of 2020.
As electricity demand grows at a rate of about 10% per year, Vietnam needs to add 3.5-4 GW of installed capacity each year. In the next two years, only about 4 GW of renewable energy installed capacity will be connected. Judging from the current level of installed capacity, Vietnam's domestic production capacity is saturated, and future PV products tend to be exported.