At Rs 5.38 per unit, Vietnam’s FIT Rates Keep Developers Interested

Vietnam, a late entrant to the solar race, but catching up fast with close to 5.69 GW of installed capacity by end 2019, has just announced its FIT (Feed-in-Tariff) rates for projects that are completed by December, 2020.

The prices, according to developers involved with projects in the country, as well as some corporate rooftop clients we spoke to, are on expected lines.  In effect, these are the prices being offered to developers who completed their investment confirmations by November 23, 2019. The country’s previous FIT policy had expired on June 30, 2019, and the new policy rates were eagerly awaited for the past few months.

Per Unit FIT Rate	In US $	(INR)
Ground Mounted Solar	0.0709	5.38
Rooftop Solar	0.0838	6.35
Floating Solar	0.0769	5.83

Vietnam Feed In Tariff Rates

As expected, the offered floating solar rates are the highest, but developers are wary of conditions including a requirement to enable fish farming on floating solar sites.

The only surprise here might be the cut in solar rooftop rates, which were expected to be maintained at the previous level of $0.0935.

With the tariffs finally out, developers face a race against time to ensure projects are completed by the December 2020 date. While disruptions from the coronavirus pandemic are relatively controllable, due to both local manufacturing and access to Chinese imports now, the risk remains that a worsening of the situation in the country could put all plans haywire, considering how tight the deadlines will be between now and the December 31 last date.

Approximately 3 GW of projects are expected to  be covered by these tariffs, valid for a 20 year period.

For Vietnam, the current round of FIT might be one of the last ones, as the country tries to follow larger markets like China, India and others to an auction based regime. The general belief is that the FIT regime has been essential for the country to attract the solar investments it has , as it might have struggled to do so otherwise.