Disclaimer

While to the maximum extent possible the authors of these Guidelines have attempted to
provide legally correct information, the document or its authors and publishers cannot be
held legally responsible for its full accuracy.

This report is for information purposes only, and the users appreciate that regulations, leg-
islation or procedures do change, and may be subject to interpretation, and different appli-
cation. Do not rely on the information in this document as an alternative to legal, technical,
financial, and/or taxation advice.

The authors or publishers will therefore not be held liable regarding any business losses,
including without limitation loss of or damage to profits, income, revenue, production, antic-
ipated savings, contracts, commercial opportunities or goodwill.

Anybody using these Guidelines is highly encouraged to provide feedback to GIZ on any
legal or regulatory changes they may be aware of, as well as the application and interpreta-
tion of them. Feedback on the general usefulness of this document is also much appreciat-
ed, in order to improve future versions.
 Acknowledgements
These Guidelines were developed by GIZ under the “develoPPP.de – PV Rooftop
Pilot Project Viet Nam” under the supervision of Mr. Rainer Brohm, International Co-
ordinator of the Viet Nam Energy Partnership Group (VEPG). We would like to thank
all those who contributed to the elaboration and publication of these Guidelines.

The main authors of these Guidelines, Ms. Ilka Buss from IB Consulting, Dr. Nguyen
Anh Tuan from Institute of Energy and Mr. Christian Schaefer from Asia Counsel,
displayed an extraordinary commitment throughout the undertaking. Dr. Tuan and
his team from Institute of Energy provided in-depth energy sector and Rooftop Solar
market expertise and liaised with local authorities and government institutions, as
well as with local Rooftop Solar developers to collect relevant information on the
legal-administrational framework and on market practice. Ms. Buss was responsible
for the structure and overall presentation of the guidelines; she also authored several
sections, managed stakeholder coordination and consolidated and integrated the
contributions of the various experts and provided overall editing of the document. In
addition to authoring several sections, Mr. Schaefer was responsible for providing
key legal and regulatory information, as well as ensuring the overall legal accuracy
and coherence of the Guidelines.

A select group of experts in the field of renewable energy, and Rooftop Solar PV
in particular, were very closely involved in the development of the Guidelines and
contributed with specific expertise and inputs to the different sections. We would
like to extend our special thanks to Mr. Tung Nguyen, Country Manager Viet Nam
of Syntegra Solar International, Mr. Nguyen Hung, Director of Cat Tuong Corp., Mr.
Ross Macleod, Senior Associate at Asia Counsel, Mr. Pham Quang Anh, GIZ Pro-
ject Officer at the EVEF/4E project, Ms. Nguyen Thi Thanh Phuong, Senior Project
Officer at EVEF/4E project, as well as Mr. Ngo Dang Chien and Mr. Vu Binh Duong,
Research Officers at the Institute of Energy for their valuable contributions.

In June 2020, a consultation and review was conducted on an advanced draft of the
Guidelines by representatives from key stakeholder groups of the RTS sector in Viet
Nam. The aim of the stake-holder consultation was to validate the usefulness of the
Guidelines, as well as to collect additional expert input to further improve the quality
and precision of the Guidelines. We would like to thank Viet Nam Electricity (EVN) and
especially Mr. Vo Quang Lam, Deputy General Director of EVN, who coordinated among
various EVN entities in different company chapters and related Power Companies for
an in-depth review of the draft Guidelines and for providing valuable contributions and
comments. We would further like to thank the following people and organizations for
their valuable comments and inputs during the consultation process:

• Mr. Ojasvi Gupta, Amplus Solar

• Mr. Phan Van Tuan, HD Bank
• Dr. Doerte Fouquet and Tasniem Jawaid, Becker Buettner Held Group (BBH)
• Mr. Federico Bestiani, Bestiani Engineering Company Ltd. (BEC)
• Mr. Nguyen Tuy Anh, Blue Leaf Energy/Macquarie Capital
• Mr. Nghiem Xuan Hoang, GEN X Energy
• Mr. Oman Singh, Hero Future Energies
• Mr. Pham Trong Quy Chau, Ho Chi Minh Business Association (HBA)
• Mr. Pham Nam Phong, Vu Phong Solar

II | Investing in Rooftop Solar Systems in Viet Nam

Foreword
Abundant solar resources and the increasing electricity demand of its commercial
and industrial sector are the pillars of Viet Nam’s rich potential for Rooftop Solar.
With Prime Minister Decision 13/2020/QĐ-TTg, published in April 2020, the Govern-
ment of Viet Nam not only renewed the country’s first Feed-in-Tariff for solar energy
from 2017 but it also set the framework for state-of-the-art investment models for
Rooftop Solar such as corporate Power Purchase Agreements, PPAs. With this le-
gal framework that will hopefully be further extended beyond 2020, Viet Nam has
the chance to develop its vast Rooftop Solar potential over the coming years and to
become one of the leading solar markets in Asia.

Germany has long-standing experience in developing solar energy markets and

with leading technology and know-how for Rooftop Solar. More than 1.5 million
Rooftop Solar systems have been installed on German roofs over the last decade
and supply millions of factories, supermarkets, public buildings and private homes
with clean and reliable energy.

With this handbook for investors and Rooftop Solar project developers Germany wants
to support Viet Nam in becoming a ‘Rooftop Solar leader’ itself.

These Investment Guidelines were developed as a part of the “PV Rooftop Pilot Pro-
ject” - a development partnership between the Deutsche Gesellschaft für Interna-
tionale Zusammenarbeit (GIZ) GmbH, Syntegra Solar International and Cat Tuong
Corporation under the develoPPP.de Pro-gramme, commissioned by the German
Federal Ministry for Economic Cooperation and Development (BMZ).

Furthermore, these Guidelines are complemented with a set of four contract tem-
plates for investors to be used to implement corporate Power Purchase Agree-
ment, Solar Lease, Rooftop Lease and Operation and Maintenance contractual
agreements. The contract templates were developed as part of the joint EU-Ger-
man Renewable Energy and Energy Efficiency (4E) Project/EU–Viet Nam Energy
Facility (EVEF).

Apart from providing these Guidelines and template contracts for Rooftop Solar in-
vestors, Germany and the EU are main contributors of the MOIT Rooftop Solar
Promotion Programme with further market enabling support activities. Among these
activities are the introduction of a Certified Solar Installer training programme in
cooperation with the German Technical and Vocational Education and Training Pro-
gramme (TVET), and the introduction of a Solar Quality Passport for Rooftop Solar
systems in cooperation with Viet Nam Electricity (EVN).

I hope these Guidelines will provide valuable know-how and hands-on advice for
investors and project developers and with this contribute to the further growth of the
Rooftop Solar market in Viet Nam.

Dr. Sebastian Paust,

First Counsellor and Head of Development Cooperation,
Embassy of Germany in Viet Nam

Technical and Administrative Guidelines for Commercial and Industrial Projects | III
Acronyms
AC Alternating Current
BMZ Federal Ministry for Economic Cooperation and Development
CIT Corporate Income Tax
COD Commercial Operation Date
DC Direct Current
DOIT Department of Industry and Trade
DP Development Partner
EPC Engineering, Procurement and Construction
ERAV Energy Regulatory Authority of Viet Nam
EREA Electricity and Renewable Energy Authority of MOIT
EVEF EU-Vietnam Energy Facility
EVN Viet Nam Electricity
FIT Feed-in Tariff
FO Facility Owner
FS Feasibility Study
GIZ Deutsche Gesellschaft für Technische Zusammenarbeit
HCMC Ho Chi Minh City
H&S Health and Safety
IEC International Electrotechnical Commission
IoE Institute of Energy
kWp Kilowatt peak
MoC Ministry of Construction
MOIT Ministry of Industry and Trade
MW(h) Megawatt (hour)
NREL National Renewable Energy Laboratory
O&M Operation and Maintenance
OEM Original Equipment Manufacturer
PC Power Company
PDP Power Development Plan
PM Prime Minister
Private PPA Private Power Purchase Agreement
PPA Power Purchase Agreement
PPP Public Private Partnership
PV Photovoltaic
RE Renewable Energy
RTS Rooftop Solar
SOM Self-Ownership Model
SSC Solar Service Company
TOM Third-Party Ownership Model
USD United States Dollars
VEPG Viet Nam Energy Partnership Group
VND Viet Nam Dong

IV | Investing in Rooftop Solar Systems in Viet Nam

Terminology and Definitions

An Engineering, Procurement and Construction (EPC) company that

EPC Contractor designs, constructs and installs solar PV systems on behalf of the
Facility Owner/Solar Service Company.

Owner of the commercial or industrial building or construction work, on

Facility Owner
which the rooftop solar PV system shall be installed.

Self-Ownership The RTS system is financed and owned by the owner of the facility
Model (SOM) where the system is installed.

A company that invests in the installation of a rooftop solar PV system

Solar Service on the commercial or industrial building of the Facility Owner, in order
Company (SSC) to produce and sell electricity to the Facility Owner and/or to the Power
Company.

Third-Party The RTS system is owned and operated by a third party – e.g. a Solar
Ownership Model
(TOM) Service Company

Technical and Administrative Guidelines for Commercial and Industrial Projects | V

Contents
Acknowledgements II

Foreword III

Acronyms IV

Terminology and Definitions V

Contents VI

Figures VIII

Checklists IX

1. Introduction 1
Objective and Scope of the Investment Guidelines 1

Target Readers 1

Structure of the Investment Guidelines 1

2. RTS Market in Viet Nam 4

The Potential for Rooftop Solar PV in Viet Nam 5

Development of the RTS Market in Viet Nam 8

Case Study – Cat Tuong and Syntegra Solar RTS Pilot Project 10

3. RTS Project Development 12

Overview of the RTS Project Development Process 13

Stage 1 – Feasibility 14

Step 1.1 – Understanding the Basic Concepts and Overall Process of an RTS Project 14

Step 1.2 – Initial Site Assessment 16

Step 1.3 – Business Model Selection 18

Step 1.4 – Detailed Site Assessment 19

Step 1.5 – Feasibility Study 20

Stage 2 – Overview of Contracting 22

Stage 2a – Contracting under the SOM 22

Step 2a.1 – Selection of EPC Contractor 22

Step 2a.2 – Contractual Agreement with EPC Contractor 24

Step 2a.3 – Contractual Agreements for the Sale of Electricity 28

Stage 2b – Contracting under the TOM 29

Step 2b.1 – Selection of the Solar Service Company 30

Step 2b.2 – Contractual Agreement with the Solar Service Company 30

VI | Investing in Rooftop Solar Systems in Viet Nam

Contents
Stage 2c - Power Purchase Agreement with EVN 38

Stage 2c.1 - Grid Connection Approval 39

Stage 3 – Financing 41

Step 3.1 – Development of a Financing Model 41

Step 3.2 – Obtaining a Bank Loan 41

Stage 4 – Permits and Licenses 42

Step 4.1 Permit and License Requirements 42

Step 4.2 – Construction Permit 42

Step 4.3 – Certificate of Eligibility for Fire Prevention and Fire-Fighting 43

Step 4.4 - Certificate of Business Registration 43

Stage 5 – Procurement, Construction and Installation 44

Step 5.1 – Site Preparation 44

Step 5.2 – Procurement, Construction and Installation 45

Stage 6 –Commissioning and (Grid) Connection 46

Step 6.1 – Internal Testing 46

Step 6.2 –Request for Grid Connection 47

Step 6.3 – Inspection by EVN 47

Step 6.4 – Signing of PPA 48

Step 6.5 - Grid Connection 48

Stage 7 – Operation and Maintenance 49

Step 7.1 – O&M Provisions and Resources 49

Step 7.2 – Energy Verification and Payment 50

Step 7.3 – Transfer of Ownership 51

Stage 8 – Decommissioning 53

4. Key References 54
Policy, Law and Regulation Documents 55

Templates and Tools 56

Other Useful References 56

Contributors 57

Imprint 58

Technical and Administrative Guidelines for Commercial and Industrial Projects | VII
Figures
Figure 1 – Solar Radiation Map 5

Figure 2 – Key Features of the FIT for Rooftop Solar Systems (PM Decision 13/2020) 8

Figure 3 – Development of RTS Market in 2019-2020 9

Figure 4 – RTS Market in Viet Nam by Region and Customer Group 10

Figure 5 – Overview of the Cat Tuong Pilot RTS Project 11

Figure 6 – Project Development Phases and Stages in the RTS Investment Guidelines for Viet Nam 13

Figure 7 – Self-Ownership Model 18

Figure 8 – Third-Party Ownership Model 18

Figure 9 – Solar Lease Agreement 30

Figure 10 – Private Power Purchase Agreement 33

Figure 11 – Rooftop Lease Agreement 36

Figure 12 – Process to Obtain a PPA and Sell Electricity to EVN 38

Figure 13 – Grid Connection Approval Process 39

Figure 14 – Official Request Letter for Electricity Sale from RTS 47

Figure 15 – EVN Confirmation Report on Meter Reading for RTS 51

VIII | Investing in Rooftop Solar Systems in Viet Nam

Checklists
Checklist 1 – Criteria for RTS Systems in Viet Nam 14

Checklist 2 – Initial Site Assessment 17

Checklist 3 – Recommended Technical Quality Standards for PV Systems 20

Checklist 4 – Best Offer Assessment for EPC Contracts 22

Checklist 5 – Key Elements of EPC Contracts 24

Checklist 6 – Key Elements of O&M Service Agreements 27

Checklist 7 – Best Offer Assessment for SSC 29

Checklist 8 – Key Elements of a Solar Lease Agreement 31

Checklist 9 – Key Elements of a Private PPA where the SSC Sells Electricity to the FO 34

Checklist 10 – Key Elements of a Rooftop Lease Agreement 37

Checklist 11 – Site Preparation 44

Checklist 12 – Internal Testing 46

Checklist 13 – Training Topics for RTS System O&M 49

Checklist 14 – Preparation of the Transfer of Ownership 52

Technical and Administrative Guidelines for Commercial and Industrial Projects | IX

1

X | Investing in Rooftop Solar Systems in Viet Nam

 1 | Introduction

Objective and Scope of the Investment Guidelines

Introduction
The Objective of these Guidelines is to provide factual, practical and up-
to-date (at time of publication) information to stakeholders interested in de-
veloping and/or investing in a Rooftop Solar (RTS) System in Commercial
Buildings or Industrial Facilities.

The Guidelines cover technical and administrative issues relevant to both

grid-connected systems and systems for self-consumption and provide:

y Important information about the RTS market development in Viet Nam, as

well as key policy and legal frameworks.

y Guidance on how to choose the most appropriate business model.

y A step-by-step breakdown of the most critical steps of RTS Project Devel-

opment Process, as well as tools to facilitate the process.

y Practical tips based on the experience of companies in Viet Nam that have
developed RTS projects in the past.

Target Readers

The Guidelines mainly target Commercial and Industrial Facility Owners

that have an interest in installing an RTS system on their premises and
would like to get reliable and up-to-date information on the most important
steps of the process.

The Target Readers also include:

y Project Developers

y EPC Contractors

y Solar Service Companies

y Investors interested in RTS projects

Structure of the Investment Guidelines

Chapter 1 provides a description of the objective and scope of the Investment

Guidelines, as well as an overview of how they are structured.

Chapter 2 provides a description of the context of the RTS market in Viet Nam.
It gives an overview of how the government policy for RTS has developed over
the last years and makes reference to key policies and regulations governing
the market. It, furthermore, provides an overview of RTS potential, key devel-
opments in the RTS market and the overall status of RTS project development
in Viet Nam. Finally, the RTS Project implemented by Syntegra and Cat Tuong

Technical and Administrative Guidelines for Commercial and Industrial Projects | 1

1 | Introduction

is presented as a successful case study – the experience gained, and les-

sons learned are reflected throughout these Guidelines and are highlighted
in several of the practical insight boxes (see Chapter 3).

Chapter 3 provides a comprehensive overview of all relevant steps and pro-

cesses that need to be completed to successfully implement an RTS project.
These are organised along the traditional project development phases (see
Figures 6 and 7). Though this document is structured in stages and steps,
it is worth noting that RTS project development stages and steps are often
intertwined, and activities should be undertaken as much as possible, in par-
allel to optimise time and resources.

The Guidelines also contain the following three types of special elements:

Practical Insight Boxes – these green boxes complement

the facts described in each sub-chapter and highlight prac-
tical experience and lessons learned from companies that
have undertaken an RTS project in Viet Nam.

Checklists – the document provides several checklists

to help the user of these Guidelines in making sure that
critical elements have been properly taken into account
throughout the project development process.

Key References – in the digital version of this document, the “Reference”

can be accessed by clicking on the active link. For the print version, the
references can be found in Chapter 4.

Chapter 4 provides full details of key references that can be used by the
readers throughout the project development process. These include online
links to key policy documents, templates and other useful references.

2 | Investing in Rooftop Solar Systems in Viet Nam

 1 | Introduction

Technical and Administrative Guidelines for Commercial and Industrial Projects | 3

2
RTS Market in Viet Nam

4 | Investing in Rooftop Solar Systems in Viet Nam

 2 | RTS Market in Vietnam

The Potential for Rooftop Solar PV in Viet Nam

The Potential for Rooftop Solar PV in Viet Nam

Viet Nam has a high potential for the development of Rooftop Solar (RTS)
Systems. Viet Nam experiences on average 4-5 kWh/m2 per day of irradia-
tion in most of its Southern and Central regions - with slightly lower levels in
Northern Viet Nam - and average peak irradiation levels of up to 5.5 kWh/
m2 per day in certain Southern regions (see Figure 1). In terms of actually
achievable yields for RTS systems, this solar irradiation corresponds to an-
nual solar power outputs of roughly 900–1,100 kWh per installed kilowatt of
system capacity (kWh/kWp) in the North, 1,100–1,400 kWh/kWp in Central
Viet Nam and 1,400–1,600 kWh/kWp in the South. These solar irradiation
levels are comparable to the rest of the ASEAN region and to those in key
mature solar markets of Spain and California.

In comparison, Germany, one of the largest solar rooftop markets in the world
with more than 1.5 million Rooftop Solar systems in operation, has average
annual system output of 950 kWh/kWp. This shows, that in general, there is
no region in Viet Nam that “does not have enough sunlight” for successfully
operating a solar PV system. Even in the North, a well-designed and effi-
ciently operated RTS system can effectively reduce the energy demand of a
commercial building or industrial facility and generate energy cost savings.

The question of financial viability of an RTS investment depends on several

factors in addition to the available solar resource: the electricity demand of the
investor or off-taker of the solar power, the tariff per unit of electricity and its
Figure 1 expected increase over the investment period, the price for excess solar pow-
Solar Radiation Map er exported and sold to the power grid (the Feed-in-Tariff, FIT), the investment
costs for the system itself and the cost and quality of op-
eration and maintenance over the life of the RTS system.
These aspects must be addressed during the early stag-
es of an RTS project (see Stage 1 - Feasibility).

The overall market potential for RTS in Viet Nam has not
yet been assessed in full detail. That being said, there are
indications that the potential is significant. Viet Nam has
a large number of medium-sized factory buildings being
built in industrial parks around the biggest cities; these
Hoang Sa (VN) burgeoning industrial facilities represent significant RTS
potential in terms of space for Rooftop Solar systems as
well as housing the potential off-takers. Furthermore, the
urban centres of the country, such as Ho Chi Minh City,
Ha Noi or Da Nang, also show a growing potential for
Rooftop Solar with a steadily increasing number of malls,
supermarkets, warehouses, office buildings and condo-
Truong Sa (VN)

miniums. A recent research project of the World Bank es-

timated the potential for Rooftop Solar in HCMC to be up
to 6,400 MW and for Da Nang to be up to 1,100 MW. For
whole Viet Nam it can be assumed that the overall RTS
potential for the country is several times the combined

Source: ESMAP/World Bank (www.solargis.com) - (edited by GIZ Viet Nam)

Technical and Administrative Guidelines for Commercial and Industrial Projects | 5

2 | RTS Market in Vietnam

potential of those two cities (for an overview of current RTS market devel-
opment see p. 8 et seqq.).

With regards to demand for RTS power, the current Viet Nam Power Devel-
opment Plan for the period 2016-2030 (PDP 7 revised) expects an annual
Practical
growth of the electricity demand in the country of 8-9% for the period 2021-
Insight
2025 and, a still remarkable 6-8% for the period 2026-2030. This means
An initial
that every year thousands of Megawatt of power capacity must be built and
solar
connected to the grid to serve this fast-growing electricity need. During this
resource assessment for
time frame of increasing demand, Viet Nam has committed to international
a specific site in Viet Nam
agreements on reducing greenhouse gas emissions to slow down climate
can be made using the
change and has introduced a domestic Green Growth strategy to allow for
online calculator of the
a more sustainable development of its economy. Thus, there is a strong
US National Renewable
political push for the development of clean power sources in Viet Nam.
Energy Laboratory
(NREL)’s PV Watts
In addition, there is a growing interest from consumers to take advantage of
Calculator or the German
the benefits of RTS systems and an emerging private energy services com-
free online PV calculation
pany sector. Commercial and industrial consumers are increasingly looking
tool PV*SOL Online.
to cooperate with investors to install RTS systems to make effective use
of large unused roof spaces, and to meet corporate targets. Private Power
Purchase Agreements (Private PPAs), where a third-party investor builds
and operates the RTS system on the roof of a manufacturing facility or com-
mercial building and sells the solar power to the building owner under a long-
term contract, have become an attractive solution for companies world-wide,
next to other (e.g. lease-based) models (see Step 1.2).

The demand for RTS can be explained by two simple facts: Solar PV tech-
Over the past 10 nology is cheap and the investment costs for rooftop systems continue to
years, the costs of sink. Over the past 10 years, the costs of PV modules, the key element of
PV modules, the an RTS system, have decreased by more than 80% and are expected to
key element of an sink further. Today, RTS systems are fully commercial and becoming a rou-
RTS system, have tine business solution for industrial, commercial and household customers
decreased by more in most markets. This is the case in Viet Nam, where the Government
than 80% and are has introduced an attractive support framework for investments in Rooftop
expected to sink Solar systems; the RTS market and policy frameworks in Viet Nam are
further. presented in the following Section.

Key Policy and Regulatory Framework for Solar PV

in Viet Nam

Viet Nam’s revised Power Development Plan 7 (PDP 7 revised), issued in

March 2016, foresees a contribution of renewable energies to the overall elec-
tricity mix in the country of 6.5% in 2020 and 10.7% in 2030. For solar power,
a corresponding capacity development of 850 MW by 2020, 4,000 MW by
2025 and 12,000 MW by 2030 are expected.

Currently, the Ministry of Industry and Trade of Viet Nam (MOIT) is developing
the latest version of this framework, the Power Development Plan 8, which is
expected to be approved in early 2021. PDP 8 is expected to include revised,
higher targets for solar energy development since Viet Nam has achieved

6 | Investing in Rooftop Solar Systems in Viet Nam

 2 | RTS Market in Vietnam

early goals, for instance, already reaching the solar energy target for 2025 by

Key Policy and Regulatory Framework for Solar PV in Viet Nam

the end of 2019.

In order for Viet Nam to meet ambitious and evolving solar targets, and sup-
port market development, a number of policy measures have been put in
place. The Prime Minister (PM) introduced a Support Mechanism for So-
lar PV via PM Decision 11/2017/QD-TTg dated 11 April 2017. PM Decision
11/2017 introduced a Feed-In-Tariff (FIT) of VND 2,086/kWh (USD 9.35 cents/
kWh) for ground-mounted solar PV power plants and a net metering support
scheme with remuneration (net metering credit) at the same tariff for surplus
electricity exported to the grid for Rooftop Solar systems. In addition, Circu-
lar 16/2017/TT-BCT of MOIT dated 12 September 2017 introduced further
detailed regulations, in particular the Standard Power Purchase Agreement
(PPA) and specific regulations for net metering.

This landmark regulation triggered investments in over 100 large-scale

ground-mounted solar plants with more than 4,500 MWp capacity by the
end of 2019; still, the net metering scheme did not have the expected
impact due to the persistence of legal uncertainties and taxation-relat-
ed barriers. Eventually, the government issued legal adjustments with
PM Decision 02/2019/QD-TTg dated 8 January 2019 and MOIT Circular
05/2019/TT-BCT dated 11 March 2019 that introduced a classic Feed-
in-Tariff mechanism for RTS systems and replaced the net metering
mechanism. With this change, the legal uncertainties and taxation is-
sues were resolved and EVN started making monthly payments to RTS
system owners, based on the fixed FIT. Investors and market stakehold-
ers in general found trust in the support mechanism and the market has
been developing at a steady pace.

With support from the EU-German Energy Programme - through the EU-Viet
Nam Energy Facility, EVEF, implemented by GIZ - and other international De-
velopment Partners of Viet Nam, MOIT developed the Rooftop Solar (RTS)
PV Promotion Program in Viet Nam 2019-2025, which was approved and
officially launched by the MOIT Minister on 5 July 2019 (MOIT Decision 2023/
QD-BCT). This Program includes mainly non-financial support measures to
remove investment and market development barriers and to enable indus-
try and Rooftop Solar sector development in general. It is expected to be a
strong driver for new investments, since it is designed to open new business
models for the commercial and industrial rooftop segment. The Program has
the overall target of facilitating the installation of 100,000 RTS systems (or
an equivalent of 1,000 MWp installed RTS capacity) by 2025. The decision
to introduce such a support program for RTS development reflects the high
priority for Rooftop Solar within the government strategy for renewable energy
development. The support of Rooftop Solar development and the implemen-
tation of the RTS Promotion Programme is also one of the key priorities of
the Viet Nam Energy Partnership Group, VEPG that includes all international
Development Partners and MOIT and focusses on supporting Viet Nam on its
transition to a more sustainable energy sector based on renewable energies
and increased energy efficiency.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 7

 2 | RTS Market in Vietnam

After the first FIT for solar energy introduced with PM Decision 11/2017
Figure 2
expired in June 2019, the government adopted a follow-up regulation with
Key Features of the FIT for
an adjusted FIT regulation for both ground-mounted and RTS systems with
Rooftop Solar Systems
PM Decision 13/2020/QD-TTg dated 6 April 2020 (see Figure 2). The new
(PM Decision 13/2020)
FIT regulation, which applies to RTS systems installed before 31 December
2020, keeps the main features of the first FIT regulation with a slightly
Validity of the regulation reduced tariff for solar power exported to the grid of VND 1,943/kWh (USD
22.05.2020 – 31.12.2020.
8.38 cents/kWh1). The most important change compared to the preceding
Feed-in Tariff for exported
regulation is the clarification of third-party ownership models, including:
solar energy
VND 1,943/ kWh (USD 8.38
y a Private Power Purchase Agreement (Private PPA) where a Solar Ser-
cents/kWh) excluding VAT.
vice Company installs and operates an RTS system on the rooftop of an
Eligibility of projects to industrial or commercial building to sell electricity directly to the owner of
obtain the FIT
FIT applies for all systems with
the building and with the option to sell excess electricity to EVN.
commercial operation date
between 01.07.2019 – 31.12.2020.
y a Rooftop Leasing Model where a Solar Service Company leases the
Duration of PPA/FIT rooftop of the owner of a commercial or industrial building to install and
As agreed with EVN and up to operate an RTS system and to sell all of the electricity generated to EVN.
a maximum of 20 years.

Definition of Rooftop Solar System With Decision 13, these investment and business models received legal
RTS system mounted on the rooftop clarity and validation, next to the more wide-spread Solar Leasing Model
of construction works not exceeding
1MW directly or indirectly connected (see Step 1.3 Business Model Selection and Step 2b.2 for more information
to the Electricity Buyers grid with a on possible contract types).
voltage of 35kV or less.

Further details on the implementation of Decision 13 have been published by

MOIT in July 2020 with Circular 18/2020/TT-BCT replacing Circular 16/2017
with effect from 31 August 2020. This Circular also includes the new template
agreements for utility PPAs in the form of a Standard PPA in its annexes,
which is the mandated contract for sale of electricity to EVN. Furthermore,
EVN has issued Guiding Letter No. 3725/EVN-KD dated 1 June 2020 on how
Technical requirements
Min. cell efficiency: 16%, to implement PM Decision 13.
Min. module efficiency: 15%

Buyer of excess solar power

Development of the RTS Market in Viet Nam
EVN, member entities
authorized by the EVN, other Until the beginning of 2019, the Rooftop Solar market in Viet Nam had only seen
organizations and individuals
who buy electricity from Sellers. around 1,800 solar systems with approximately 30 MWp capacity connected
to the grid. The new solar FIT regulation that was introduced in April 2017 had
Seller of excess solar power not mobilized many investments due to implementation and taxation problems.
Off-taker of the electricity or After the regulatory adjustment of PM Decision 11/2017 in early 2019, invest-
system owner (Facility Owner,
Solar Service Company or other ments in Rooftop Solar systems developed strongly (see Figure 3).
third-party investor).

Freely-negotiated PPA and During 2019, more than 20,000 Rooftop Solar systems with a capacity of
price (following current around 360 MWp were installed and connected to the grid. It is worth noting
regulations) In the case the
Buyer is not EVN or its
that almost 200 MWp of this capacity was installed in the second half of the
authorised member entities. year; that was after the solar FIT regulation had officially expired and the
Prime Minister Decision to extend the FIT regulation was pending. During
this period of policy uncertainty, market stakeholders showed great trust in
the government commitment to further support RTS investors. Furthermore,
EVN showed an exceptional commitment during this period by connecting

1. FIT is subject to adjustments regarding VND-USD exchange rate

8 | Investing in Rooftop Solar Systems in Viet Nam

 2 | RTS Market in Vietnam

Figure 3 – Development of RTS Market in 2019-2020

Development of the RTS Market in Viet Nam

48,631
42,837
36,389 1168
965
27,845 31,506
24,459
22,323 765
26,293
23,460
16,741
19,378 652

9,314 12,765
573

1,800 48,631 519

3,158
Total Systems 470
429
1,168 MWp
Total Capacity 378
(MWp) 318
281

216
193

30.12 42

Mar 19 May 19 Jul 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20

Total Capacity (MWp) Number of Systems

Source: http://rooftopsolar.com.vn/ (data source: EVN)

new RTS systems, installing the bi-directional meters at the project sites,
During 2019, more recording the solar energy delivered to the national grid and confirming to
than 20,000 Roof- customers that payments would be made upon government approval of the
top Solar systems new FIT regulation.
with a capacity of
around 360 MWp The robust growth of the RTS market continued in the first months of 2020
were installed and until the new FIT regulation was finally published on 6 April 2020 with PM
connected to the Decision 13/2020.
grid.
At the end of August 2020, 48,631 Rooftop Solar systems with a total
capacity of 1,168 MWp were installed in Viet Nam (for more information,
refer to the VEPG RTS Factsheets).

The market development in 2019 and the first months of 2020 demonstrated
the strong demand for Rooftop Solar in the country and the robustness of
the market, even during the time when the legal support mechanism was
not officially confirmed. With the new FIT regulation in place, market stake-
holders expect strong investment in the market through 2020 and beyond.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 9

2 | RTS Market in Vietnam

Figure 4 – RTS Market in Viet Nam by Region and Customer Segment

Capacity by Customer Type

(Until August 2020)

Industrial Commercial Residential Administration

3,211 3,110 41,560 750
systems systems systems systems
622.6 MWp 125 MWp 377.8 MWp 43.3 MWp

Capacity by Customer Type Rooftop Solar Development by EVNPCs

(Until August 2020) (Until August 2020)

EVN Hanoi
4% 12.51 MWp
Administration 32%
Residential
EVNNPC
67 MWp

1168.09 EVNCPC
MWp 390.9 MWp

EVNHCMC
53% 11% 129.9 MWp
Industrial Commercial

EVNSPC
567.7 MWp

With this bright future for the RTS market in mind, it is even more important
that installations follow high-quality standards and investors and project de-
velopers are well informed about the specific procedures and requirements
of authorities and EVN for a successful project development and imple-
mentation. It is in this context that these Guidelines have been developed
to support investors and project developers with key information and useful
insights for RTS in Viet Nam.

Case Study – Cat Tuong and Syntegra Solar RTS Pilot Project

In October 2018, Syntegra Solar, an international RTS developer, and Cat

Tuong, a local market leader in insulation material manufacturing, entered
into a strategic partnership with technical assistance from GIZ to develop a
high-quality pilot RTS project (“the Project”) at the Cat Tuong factory in Long An
province to demonstrate the viability of RTS systems in Viet Nam. Furthermore,
the Project aims at improving technical and administrative framework condi-
tions for the replicability of PV rooftop projects across the country.

Figure 5 provides an overview of the key specifications of the Project.

10 | Investing in Rooftop Solar Systems in Viet Nam

 2 | RTS Market in Vietnam

Figure 5 – Overview of the Cat Tuong Pilot RTS Project

Development of the RTS Market in Viet Nam

Location
Cat Tuong factory in Long An province

Business Model Capacity Expected Power Output

Self-Ownership Model 850 kWp 1,230 MWh/year

Roof space Portion of Cat Tuong’s power consumption covered

7,400 m2 50%
Number of modules
2,560

Savings related to optimised

electricity costs
USD 102,000 or VND 2.4 billion

CO2 emission reductions

1,092 tons/year

The pilot RTS – implemented at the Cat Tuong factory inside the Lien Hung
industrial zone in Long An – has a power capacity of 856.7 kWp generated
by approximately 2,560 PV modules – covering 7,400 m2 of roof space.

The main motivation for the owner to invest in solar was the potential to
The main significantly reduce high energy costs generated by heavy machinery, es-
motivation for pecially during peak times. Furthermore, this was a recognized opportunity
the owner to to utilize and draw an economic benefit from their otherwise unused roof
invest in solar spaces. The newly built RTS system is expected to generate around 1,230
was the potential MWh of solar electricity every year, covering, on average, around 50% of
to significantly the annual electricity demand of the factory. Furthermore, the excess so-
reduce their high lar power that cannot be directly used in the factory (e.g. generated during
energy costs maintenance and holidays) will not be wasted and can be sold to EVN for an
generated by their attractive Feed-In Tariff of USD 9.35 cent/kWh. On an annual basis, the PV
heavy machinery, system is expected to save about USD 102,000 (VND 2.4 billion) from Cat
especially during Tuong factory’s annual energy costs and help to reduce of about 1,092 tons
peak times. of CO2 emissions annually.

A main challenge during the development of the Cat Tuong RTS Project was
extreme weather (high temperature on the roof, rainy season, lightning area)
and its impact on installation. All workers followed strict safety instructions
and shifts were limited to reduce early morning and late afternoon/evening
exposure to weather-related risks. Another challenge was the need to plan
the delivery of the RTS system components between Syntegra and Cat Tuong
very carefully, as the production at Cat Tuong runs almost around the clock
and most of the laydown area is constantly occupied.

Despite these challenges, all the efforts payed off as the construction phase
was completed in only 2.5 months and the RTS system was commissioned
just in time in June 2019 - before the originally planned commercial opera-
tion date (COD).

Technical and Administrative Guidelines for Commercial and Industrial Projects | 11

 3
3 | RTS Project Development

RTS Project Development

12 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Overview of the RTS Project Development Process

Overview of the RTS Project Development Process

The Project Development Process typically consists of 4 major Phases
(see Figure 6):

Phase I – Preparation, in which all the necessary studies are conducted to

assess the viability of a project and pre-agreements are made between key
stakeholders in the project.

Phase II – Planning and Development, in which the project is designed,

agreements between key stakeholders are formalised, the project reaches
financial closure and construction/installation works are implemented until
commissioning of the system is achieved.
Practical
Insight Phase III – Operation and Maintenance (O&M), Operation and Maintenance
Although (O&M), in which the project is operated and maintained and generates the
the phases, intended outputs and revenues during the system life cycle.
stages and
steps are presented as a Phase IV – Decommissioning, in which the project ceases to operate (typ-
sequence, it is important ically after the conclusion of the technology’s lifetime) and must be decom-
to note that the Project missioned, dismantled and any waste material properly disposed of.
Development process
is rarely linear, and In these Guidelines, eight (08) distinct Stages within these four Phases have
processes are likely to been identified (see Figure 6). These stages and related critical steps are
take place in parallel. described in detail in the subsequent Chapter and Sub-Chapters.

Figure 6 – Project Development Phases and Stages

in the RTS Investment Guidelines for Viet Nam

Phase I Phase II
Preparation Planning and Development
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Feasibility Study Contracting Financing Permits and Procurement, Construction
Licenses and Installation

Phase III Phase IV

Operation and Maintenance Decommissioning
Stage 6 Stage 7 Stage 8
Commissioning and Operation and Decommissioning
(Grid) Connection Maintenance

Technical and Administrative Guidelines for Commercial and Industrial Projects | 13

3 | RTS Project Development

Stage 1 – Feasibility

During the Feasibility Stage a number of technical and financial studies

are conducted to determine the viability of installing an RTS system at a
specific building or facility. Based on the results of the Feasibility Stage,
the decision to invest or not in the RTS system is made.

Step 1.1 – Understanding the Basic Concepts and Overall Process

Practical
of an RTS Project
Insight
Can more
Before undertaking an RTS project, it is important to understand some
than 1MW
basic concepts and to have a broad overview of what the process of de-
be installed on the same
veloping an RTS project entails.
rooftop? There are ex-
amples, in practice, that
A Rooftop Solar (RTS) system can be simply defined as a solar PV system with
multiple systems of up to
photovoltaic panels mounted on the rooftop of a building or construction work.
1MW can be set up on the
same rooftop space, as
In Viet Nam, to qualify and benefit from the RTS regulatory support, a so-
long as each system has
lar installation must meet certain criteria and stay within certain defined
its own connection point (if
thresholds. These criteria are specified in PM Decision 13/2020/QD-TTg
connected to the grid), and
and Checklist 1 provides an overview of the most important criteria an RTS
its own inverter and meter.
system must fulfil to qualify.

All systems that exceed 1MW (whether on a rooftop or on the ground), or

otherwise do not meet the above criteria for RTS, are subject to different regu-
lations and are not covered in these Guidelines.

Checklist 1 – Criteria for RTS Systems in Viet Nam

Criterion Description

Capacity 9 The capacity of an RTS system must be ≤ 1MW.

Practical
Insight Voltage 9 The voltage of an RTS system must be ≤ 35kV
Is the FIT 9 The solar cells must have an efficiency >16% and the module
Efficiency
fixed? efficiency must be >15%.

In point 2 of Article 8 of 9 The RTS system must be installed on a building. The relevant
Decision 13, the FIT for regulations require that the RTS system must be installed on the
Other criteria rooftop of “construction works”. This suggests that an installation on
the current year (in VND)
the ground is not possible. Ground-mounted solar projects underlie
will be calculated based
an entirely different legal and administrative framework.
on the exchange rate from
the central bank on the last
day of the previous year. RTS systems that fulfil the above criteria and are connected to the grid and
EVN has issued a Guid- sell the electricity (all or partially) to the Power Company (PC) – which is EVN
ance Letter No. 3725/EVN- in Viet Nam - benefit from a preferential Feed-in Tariff (FIT). The FIT is de-
KD dated 1 June 2020. fined as the price that the PC pays for every unit (kWh) of electricity fed into
Effectively, the FIT is 1,913 the grid by a private producer.
VND/kWh in 2019 and
2. It should be noted that the threshold under Decision 13 is 1MW not 1MWp. The MW capacity is based
1,940 VND/kWh in 2020. on AC output that the RTS system is capable of delivering, and the MWp capacity is the aggregate peak
capacity of all solar modules in the RTS system. However, in practice the PC will also check the MWp
capacity and also require this to be equal to or under 1MWp.

14 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Currently, the FIT applicable to RTS systems in Viet Nam amounts to VND

Stage 1 – Feasibility
1,943 (USD 8.38 cents) per kWh, based on the exchange rate on 10 March
2020. This FIT level applies and is guaranteed for RTS systems that are
installed and connected to the grid before 31 December 2020 and has a
validity of up to 20 years thereafter, depending on the duration of the Pow-
er Purchase Agreement (PPA), signed between the project owner and the
power company, EVN. Step 6.4 provides more details on the PPA.

RTS systems that fulfil the above criteria may now also be used, by law, to
sell electricity to private off-takers (instead or in addition to EVN) under a
Private PPA. Under a Private PPA, it is common that the private off-taker of the
generated electricity produced can obtain a lower electricity tariff than if they
would buy the electricity from the grid. This has made third-party ownership an
attractive business model for both Solar Service Companies and commercial
and industrial building owners. Step 2b.2 provides more details on the Private
PPA and other third-party ownership business models.

In addition to the obvious financial benefits from attractive electricity off-take

prices, renewable energy (RE) is currently included among the sectors qual-
ifying for preferential investment in Viet Nam and is entitled to certain tax
incentives:

y A Corporate Income Tax (CIT) rate of maximum 10% instead of the

usual 20% for a period of 15 years from the first year of generating reve-
nue. This can be extended by another 15 years upon the approval of the
Prime Minister. This tax incentive is applied as follows:

◊ Year 1 to 4: CIT rate of 0%

◊ Year 5 to 13: CIT rate of 5%
◊ Year 14 to 15: CIT rate of 10%
◊ Year 16 onwards: CIT rate of 20%
Practical
Insight These incentives apply to power generation from renewable power sourc-
By switch- es and typically allow a company that exclusively engages in owning the
ing to Solar RTS for sale of electricity to benefit from the tax incentives. Where com-
Power, RTS projects panies are engaged in a range of business activities (including non-pref-
generate greenhouse gas erential activities), such companies must use separated accounting to
reduction (expressed in benefit from the tax incentives for renewable power production. It is also
tonnes of CO2). These worthwhile to note that the tax incentives are linked to the production of
emission reductions can be electricity, and thus would not apply under the leasing model (where the
turned into carbon credits, owner of the RTS only receives leasing income but is not the producer of
which can be traded in the electricity generated from the system).
national or international
y Import Duty Exemptions: RTS projects are exempt from import duties
carbon markets. The car-
on fixed assets in accordance with regulations on export and import du-
bon footprint of a building
ties (Article 14 of Decree No. 134/2016/ND-CP). Duty exemptions apply
is also an important factor
for all renewable energy systems and their components when they are
considered when the own-
purchased to be used by the buyer themselves. This means, these would
er wants to obtain a LEED
not apply for systems used under a leasing agreement. These apply as
Green Building Certificate.
follows:

Technical and Administrative Guidelines for Commercial and Industrial Projects | 15

 3 | RTS Project Development

◊ Import duty exemptions are granted for goods imported to form fixed
assets of the project (goods imported during the project construction
and development stage).

◊ Import duty exemption also applies to materials/ supplies and com-

ponents that can not be manufactured in Viet Nam imported during 5
years from the project commencement date to service the operating
purpose of the Project.

◊ To benefit from these exemptions, a detailed master import list

needs to be approved by the relevant customs authorities prior to
conducting the imports to confirm that the relevant imported items
form part of the fixed assets respectively exempted materials above.

◊ Other imported items and materials are subject to regular tariff rates.

Applicable incentives are well summarised in MOF Official Dispatch 1534/

RTS projects are
BTC-CST. Note that articles 1-4 of this Dispatch are applicable to all RTS
exempt from import
systems as defined in Checklist 1 and only article 5 (related to VAT) is appli-
duties on fixed assets
cable to systems <50kW only.
in accordance with
regulations on export Step 1.2 – Initial Site Assessment
and import duties.
(Article 14 of Decree No. 134/2016/ND-CP) The purpose of the Initial Site Assessment is for the Facility Owner (FO) to
have a rough idea of whether the installation of an RTS system is generally,
technically feasible on a specific rooftop, before spending any time or money
in expert advice.

There is a set of basic technical requirements that need to be met, in order

to ensure that an RTS system will perform well. These requirements are
standard and include the orientation of the roof towards the sun, the absence
of any shadows – e.g. from neighbouring buildings or trees – that can reduce
the system’s performance, and other important factors.

Checklist 2 is not exhaustive in every circumstance, but can be useful for this
initial evaluation process:

If the FO finds that their rooftop has potential and wants to pursue this
opportunity further, a detailed assessment can be done by experts (EPC
Contractors or other third parties) to give a precise assertion about the
project’s potential. The detailed assessment is described under Step 1.4.

Step 1.3 – Business Model Selection

Two main types of business models are applied in RTS projects, the Self-Own-
ership Model and the Third-Party Ownership Model.

In the Self-Ownership Model (SOM) (see Figure 7), the RTS system is fully
financed, owned and operated by the Facility Owner. The produced electricity
is normally used for self-consumption and excess electricity is sold to the local
Power Company (PC) or to another off-taker, for example a neighbouring

16 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 1 – Feasibility
Checklist 2 – Initial Site Assessment

Question YES NO

Roof Conditions Check the Box

1. Inclination – is the roof’s inclination angle

lower than 30°?

2. Orientation – does the roof face south?

3. Material and Structure – how old is the roof? Is the

building’s architecture and material capable of bear-
ing an additional weight of about 20 kg/m2?
4. Shading – is the roof exposed to shade from neigh-
bouring buildings, trees or other structures?
5. Does the roof have enough space to accommo-
m2
date an RTS? How large is the roof (m2)?
Electricity Consumption
6. How high is the electricity consumption of the
kWh/ day
building/facility on average?
7. When is the electricity consumption taking place Days /
mainly? Nights

Assessment Guidelines

• If questions 1. and 2. are answered with “NO”, the output of the

system will be affected significantly. It is not recommended to invest
without professional advice.

• Question 3: if the roof needs to be replaced within 5-10 years, it should

be replaced at the time the RTS system is installed. If the question re-
garding structure is answered with “NO”, it will be necessary to invest
in reinforcing the structure to be able to carry the weight of the RTS
The purpose of
installation. In this case, the cost of reinforcing the structure needs to
the Initial Site
be considered in the overall feasibility assessment.
Assessment is for the
FO to have a rough • If question 4. is answered with “YES”, it means that the performance
idea of whether the (total electric output) of the RTS system might be significantly reduced
installation of an RTS and an investment is not recommended.
system is generally,
technically feasible • Question 5: a rough estimation of the achievable electricity output
on a specific rooftop, based on the roof size can be made by applying 1kWp = 7-10m2.
before spending any • The electricity consumption amount and pattern will play a role in
time or money in choosing the right business model and contract type with a third party,
expert advice. if the facility owner does not plan to operate the RTS system them-
selves (see Step 1.3). E.g. if the current electricity consumption is low,
it is possible to use the system to cover the consumption only (small
investment). But it is also possible to opt for a bigger system that uses
the whole roof space, covers 100% of the FO’s demand and allows
the sales of surplus power generated to EVN or other third parties.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 17

3 | RTS Project Development

Figure 7 – Self-Ownership Model

EPC contract
LEASE of RTPV SYSTEM

Facility Owner
In the Self- Owner of building or Payment for
installation
Ownership Model factory who wants to install
RTS on the roof
(SOM), the RTS
system is fully EPC Contractor
installation of A company who designs,
financed, owned RTS system constructs and installs
and operated by the RTS systems

Facility Owner.

EPC contract
LEASE of RTPV SYSTEM

RTS system is fully financed, owned and

operated by the Facility Owner

Practical Facility Owner

Payment for
Owner of building or
Insight facility. However, the FO
factory who wants to install can also choose to sell all of
the electricity to the
installation
Syntegra has PC and/or
RTS on a theneighbouring
roof facility. The advantage of this
model is that the FO
implemented has full control over the installations and the system’s performance. On the
EPC Contractor
a project other hand, the FO must also makeinstallation
the full investment
of and is solely liable
A company whofor
designs,
based on the Third-Party- maintenance and repairs. RTS system constructs and installs
RTS systems
Ownership model, and
a lease component has In the
Facility Owner Private PPA
Third-Party Ownership Model (TOM) (see Figure 8), the
Solar Service
RTS system
Provider
Does (third-party)
also been included. In this is not have
fully to
financed, owned and operated by a Solar Service Company
RTS system is fully financed, owned and (SSC).
A company that
invest in the RTS
operated by the Facility Owner invests in RTS
460kWp project, developed Theand
system Facility Owner and the SSC sign an agreement laying out the terms of the
can get
electricity at a price Payment for system to be built
at VSIP1 Industrial Zone partnership. In Viet Nam, the legal basis allows three (3) main types
Electricity of agree-
on the roof of the
lower than the
in Binh Duong Province, ments:
market retail1) a Solar Lease, 2) a Rooftop Lease or 3) a Private Power Purchase
price Facility Owner.
They sell electricity
the system was financed Agreement (Private PPA). More details on these types on agreements generatedcan frombethe
and is owned and operated found under Step 2b.2. system to the
Facility Owner.
by Syntegra. The Facility Electricity
Supply
Owner purchases the Figure 8 – Third-Party Ownership Model
Ownership of
electricity from Syntegra RTS system
for a price/kWh at least Facility Owner Private PPA Solar Service
Provider
Payment for RTS
Does not have to (third-party)
5% lower than the grid. system installation
invest in the RTS A company that
In addition, the FO pays system and can get invests in RTS
electricity at a price Payment for system to be built
a monthly system renting lower than the Electricity on the roof of the
fee based on the energy Installation
market of
retail price Facility Owner.
RTS system They sell electricity
saving efficiency of the
solar power system.
EPC contract generated from the
system to the
Facility Owner.
EPC Contractor Electricity
A company who designs Supply
constructs and installs Ownership of
RTS systems RTS system

Payment for RTS

system installation

Installation of
RTS system
EPC contract
EPC Contractor
A company who designs
constructs and installs
RTS systems

18 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

The advantage of the TOM model is that the FO does not have to invest in the

Stage 1 – Feasibility
RTS system and can get electricity at a price lower than the market retail price
and/or the FO can earn additional revenue for simply leasing out its otherwise
unused rooftop space to the SSC. Mostly, the FO has limited-to-no responsi-
bility for operating and maintaining (O&M) the system.

In order to be able to choose which model is the most suitable for a particular
FO, the FO will usually look at the cost-benefit analysis of each model.

Ideally, the FO will contact both an EPC Contractor and a Solar Service
Company to conduct a site assessment (Step 1.4) (and a feasibility study
(Step 1.5), if required) and provide offers, which can then be compared to
choose the best option. Based on this, the FO will determine whether to
Practical
self-invest (SOM) or whether to proceed with the TOM.
Insight
For the
Relevant contractual arrangements under the SOM are described in Section
Cat Tuong/
Stage 2a – Contracting under the SOM. Relevant contractual arrange-
Syntegra
ments under the TOM are described in Section Stage 2b – Contracting
pilot project, a professional
under the TOM.
surveyor was engaged to
conduct a complete survey
Step 1.4 – Detailed Site Assessment
of all available roofs to
choose the most appropri-
Depending on the chosen business model, the Detailed Site Assessment is
ate one. Static calculations
carried out by either an EPC contractor (for SOM) or by the Solar Service
were then done to make
Company (for TOM).
sure that the roof could
bear all the structures and
The Detailed Site Assessment provides the necessary data to be able to
withhold the additional
design the RTS system, calculate the budget for the project and develop
load of the RTS system.
the financial model of the project.
Weak locations were then
reinforced, and parts of the
Under the Self-Ownership Model, the FO must contact EPC contractors in the
roof skin were replaced
market to visit the facility and carry out the assessment (and feasibility study,
before installing the RTS
if required), which will allow the EPC contractor to prepare a financial offer and
system. It is highly recom-
the FO to choose the best offer available.
mended to very carefully
check and ensure the
Under the Third-Party Ownership Model, if the FO does not already have an
rooftop quality at the very
agreement with a specific SSC, the same process can be followed, i.e. several
beginning of the project.
SSCs can be invited to make a site assessment and submit an offer to the FO.
As the RTS system will be
running for up to 20 years,
During the Detailed Site Assessment, further information is required for the
this additional early invest-
design & engineering, as well as for the future construction and installation of
ment is more than worth-
the RTS systems, the following will need to be collected and evaluated:
while and will pay off.

y Engineering details, such as roof details, types & material of roof skin,
roof substructure, roof height, roof access way, location of inverters, AC
and DC wire connections and requirements, distribution box requirements,
potential interference with production or transportation infrastructure at the
site, etc. It is recommended to prepare and provide drawings & sketches
of the existing building/roof to the contractor.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 19

3 | RTS Project Development

Practical y Requirements of the FO for the RTS system (e.g. self-consumption sys-
Insight tem, energy storage, etc.)
Another
important y Grid connection and energy costs
factor to as-
sess is a parameter called ◊ Grid operator
cos(phi), which ranges ◊ Grid connection point: locations of main distribution panel, capacitor,
between 0 to 1. This factor rated voltage & frequency, existing transformer etc.
decides whether the elec-
tricity consumption on site is y Detailed consumption profile (daily, weekly, monthly, yearly). Here the FO
resistive (cos(phi) close to 1) can provide screen-shots or copies of bills. Other details related to the con-
or reactive (cos(phi) is close struction planning, such as access roads to the site, laydown area, business
to 0). A penalty is charged type of the factory, working hours, etc.
by EVN if cos(phi) < 0.9.
Step 1.5 – Feasibility Study
When the RTS system is
connected to the FO’s elec- Conducting a feasibility study is not a mandatory step for RTS systems
tric system it could modify under Vietnamese law. However, the FS is critical for decision-making
this cos(phi), which would and can help the FO determine the size of the RTS system which impacts
require the installation of investment decisions and business model choice. Specifically, the fea-
an inverter to improve the sibility study will inform the selection of main components, types of PV
cos(phi) value. modules & inverters used, options for mounting structures and enable
an estimate of energy yield & system performance. The FO may choose
Alternatively, solar output to carry out a feasibility study, usually done by a specialised firm or with
can be capped so that support from an EPC contractor, as it can give an indication and more
cos(phi) is always > 0.9, detailed overview of the costs and benefits of an RTS project.
or the FO might decide to
even sell 100% of the elec-
tricity to EVN depending Checklist 3 – Recommended Technical Quality Standards
on the extent to which the for PV Systems
penalty affects the overall
Criterion Assessment
cost-benefit balance. As
this factor may change the 9 IEC 61215: Crystalline silicon (c-Si) terrestrial PV modules - design
whole business model, a qualification and type approval
check and advise on this 9 IEC 61646: Thin-film terrestrial PV modules - Design qualification and
and other quality param- type approval
eters required by EVN Modules 9 IEC 61730: PV module safety qualification
(MOIT Circular 39/2015/ 9 IEC60364-4-41: Protection against electric shock
TT-BCT and latest revi- 9 IEC 61701: Resistance to salt mist and corrosion (required for module
sions from 2019 in MOIT being installed near coast or maritime applications)
Circular 30/2019/TT-BCT) 9 IEC 61853-1: PV module performance testing and energy rating
by an accredited profes- 9 Mounting systems should be designed specifically for the site
Mounting
sional is highly recom- with structural design calculations providing verification of the
system
mended. site-specific design and structural warranty document.
9 EN 61000-6: Electromagnetic compatibility (EMC) generic standards
9 EN 50178-1997: Electronic equipment for use in power installations

Inverter 9 IEC 62109: Safety of power converters for use in photovoltaic power systems
9 IEC 62116: Islanding prevention measures for utility interconnected
photovoltaic inverters

20 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 1 – Feasibility
Checklist 3 – Recommended Technical Quality Standards
for PV Systems (cont.)

Criterion Assessment

Cables, 9 The cables should follow international standards, including IEC

switches 60502 and 60364
and general 9 Specifications for switches, protection devices as well as control
electrical systems that have the function to prevent re-closing in the event of a
design blackout and to ensure the voltage, frequency, harmonics standards
at the point of measurement (MOIT Circular 39/2015/TT-BCT dated
November 18, 2015 and amendments in MOIT Circular 30/2019/TT-
BCT) and compliance with the relevant standards including IEC 60497
9 Justification of compliance of all system elements with the specific
regulations of the Vietnamese Technical Standards for Connecting
Solar Power Systems (TCVN), which are published by the Vietnam
Standards and Quality Institute (STAMEQ), under the Directorate
for Standards, Meteorology and Quality of the Ministry of Science
and Technology. Also refer to the related Database for Standards
and Regulations a comprehensive list of Vietnamese standards for
electrical design (in VN only)
9 For commissioning the minimum required standard is IEC 62446:
Grid connection of photovoltaic systems - Minimum requirements
for system documentation, commissioning tests and inspections.

The Feasibility Study (FS) can be prepared based on the results from the Detailed
Site Assessment, and typically consists of the following key elements:

y Technical Design – The Technical Design must include technical drawing

Practical
on how the RTS system will be installed on the FO’s premises, as well
Insight
specific details on the different elements of the system, and the quality
At the Cat
standards for equipment and infrastructure.
Tuong/
Syntegra pilot Project, the
y Budget (CAPEX)– Based on the technical design and the overall pro-
high levels of dust pollution
posed capacity of the system, the FS should include a clear budget, spec-
at the project site led to an
ifying all required components for the system and their cost, as well as all
increased need to clean
required construction works and their estimated cost.
the panels and thus to
higher O&M costs. Factors
y Estimation of Operational Costs (OPEX) – operational costs of the RTS
like these should be
system should be calculated and typically include staff costs for operation
taken into account when
and maintenance (O&M) and spare parts.
calculating O&M costs.

y Financial Model – the financial model makes projections of the project’s fi-
nancial performance over its foreseen lifetime. It takes into account CAPEX,
OPEX, savings on electricity costs, expected revenues (based on expected
electricity yields, applicable electricity tariff, etc.), as well as other important
factors, such as financing structure (capital – loan structure) and financing
costs, depreciation of the RTS system over time, etc. The financial model
should provide values for typical financial performance indicators, such as in-
ternal rate of return (IRR) and payback time, which e.g. for an RTS system in
Southern Viet Nam should be 14% and < 6 years, respectively.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 21

 3 | RTS Project Development

The results of the feasibility study can be useful to assess the quality of EPC
contractor and SSC offers (Step 2a.1 and Step 2b.1) and also to inform the
structure of the contract between the FO and the SSC (Step 2b.2).

Stage 2 – Overview of Contracting

In the Contracting Stage the Facility Owner signs all contracts required
to successfully develop, operate and maintain the RTS system. Which
contractual agreements are required depends on which business model
the FO has chosen (SOM or TOM) and also the different types of agree-
ments that are possible under each of these two models, depending on
who will use the electricity generated by the system and other particu-
lars of the arrangement.

This section has been split into three sub-Sections. Stage 2a details the con-
tractual agreements typically made under the SOM, while 2b details the con-
tractual agreements typically made under the TOM. Section 2c deals with the
Sales of Electricity to the national PC – EVN in Viet Nam – which is possible
under both the SOM and the TOM.

Stage 2a – Contracting under the SOM

In the Contracting Stage the Facility Owner chooses the party to develop the
In the Contracting
RTS system installation on their building/facility. The agreement between
Stage the Facility
a Facility Owner and an EPC Contractor is formalised through the signing
Owner chooses the
of a Contract. Furthermore, the FO may enter into agreements with EVN.
party to develop
the RTS system
Step 2a.1 – Selection of EPC Contractor
installation on their
building/facility.
Based on the feasibility studies received, the FO will be able to choose the
party best suited to implement the project and then can enter into an EPC
agreement with them. Checklist 4 provides a number of useful criteria
that can be used to determine which is the best offer.

Checklist 4 – Best Offer Assessment for EPC Contracts

Criterion Assessment

9 Check that all system elements are included

Technical
9 Check that all necessary infrastructure works are included
Design
9 Check that all relevant quality standards have been addressed
9 Number of years of experience and number of projects: the more
similar projects an EPC contractor has carried out in the past,
the better the chances that they can deliver well on the project.
9 Check project references provided (call respective facility owners
Track record
or visit the sites), whenever possible
9 Financial stability/ financial guarantee
9 Long standing and good relationship with proposed subcontractors
as this translates to lower risks related to project implementation

22 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2 – Overview of Contracting

Checklist 4 – Best Offer Assessment for EPC Contracts (cont.)

Criterion Assessment

9 An EPC contractor typically requires a down payment of 10-30%

upon contract signing
9 The payment schedule should be in line with the progress of the
RTS system installation
9 It may be possible to negotiate a retention of 5-15% during the
Payment warranty period, rather than requiring the EPC contractor to provide
Schedule a defects liability bank guarantee during the warranty period. This
retention is only paid to the EPC contractor when the RTS system has
shown no defects during the warranty period or defects have been
properly repaired by the EPC contractor, as per warranty conditions.
The FO typically would not be required to establish an escrow or put
in place a bank guarantee to secure payment of the retained amount.
9 If required by the FO, the EPC contractor could also offer O&M
services for a pre-determined period of time (as per industry
practice, the EPC contractor is usually responsible for O&M for
the first 1-2 years, after which the FO takes over the O&M). If so,
O&M Costs
the O&M fee needs to be included in the EPC contract (as well as
(if included in
the duration of coverage and services included).
the scope)
9 The scope of O&M services should typically include online monitoring
of the RTS system together with periodic site inspections to check
for faults, to clean the system, and to do repairs/replacements in
cases of breakdown or malfunction of the RTS system.
9 The electricity output should be enough to cover a considerable part
of the FO’s electricity consumption and generate significant savings
Electricity
that justify the investment (in case of a self-consumption model).
Output and
9 The cost per kWh calculated over the project lifetime based on the total
Price
investment and operational costs should not exceed the tariff offered
by the PC, as it otherwise would not generate any savings to the FO.
9 EPC contractors may offer a Performance Ratio Guarantee with an annual
Guarantees
deduction rate to ensure the quality of the system over the project lifetime.

9 Responsibility for insurance will vary from project to project. In general,

Insurance
the EPC contractor is in charge of insuring construction works.
Construction and
Commissioning 9 For a 1MW RTS system the time for construction and commissioning
Schedule together typically lasts around 2 months.
(Project Time-line)
9 Generally, the guarantees of the manufacturers of the system components apply.
9 The FO should require the EPC contractor to present warranty
information for all equipment/parts to be used at the design stage. The
warranty period for RTS systems are typically around 2 (two) years.
Warranty
However lateral warranty for manufacturing defects of components
can be five (5) years. FO shall ensure that the EPC contractor shall
pass the module warranty and other equipment warranty from the
Original Equipment Manufacturer (OEM) to the FO.

Other 9 The FO may require the EPC to provide bank guarantees to guarantee
Information the advance payment and the contract performance of the EPC.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 23

3 | RTS Project Development

Step 2a.2 – Contractual Agreement with EPC Contractor

For the SOM, the FO enters into a contract with the EPC contractor cho-
sen in the previous step. The FO can choose to either commission the
EPC Contractor for the installation and construction works only (Check-
list 5) or to also include an O&M service agreement for a certain time
period in the contract (Checklist 6). The FO can also choose to enter
into an O&M service agreement with yet another party, e.g. if the EPC
Contractor does not offer such services or another service provider is
better qualified and/or offers better conditions.

EPC contractors typically provide their contract form to the FO for re-
view and negotiation of the terms of contract. The EPC contract must
mirror all the elements listed in Checklist 4, as per the EPC contrac-
tor’s offer. Furthermore, the contract should optimally address the is-
sues listed in Checklist 5.

Checklist 5 – Key Elements of EPC Contracts

Criterion Assessment

Description of 9 Technical description of the RTS system (specifications and

the RTS System, design), attributes of the location, hardware for installation,
Design and Works and associated connections thereto, as per accepted offer.

Construction and 9 Breakdown of RTS construction and installation into discrete

Commissioning phases with expected completion deadlines for each phase.
Schedule (Project 9 Definition of penalties, payable for each day past the deadline
Time- line) of every phase of construction to encourage adherence to the
construction plan. The maximum amount should typically lie
between 8-15% of the contract price.
9 Definition of Long Stop Date, beyond which FO can terminate
or renegotiate the EPC contract.

System Performance 9 Minimum capacity thresholds expected from the RTS system
Guarantees are defined, based on the consumption needs of the FO and
the theoretical capability of the components of the system.
9 Expected threshold performance statistics must be met
by a certain date or the EPC Contractor must pay a pre-
agreed penalty.

Quality and 9 The scope and duration of EPC Contractor warranties can
Construction range from paying the cost of replacing equipment to merely
Warranties assisting with the implementation of manufacturer warranties.
9 The warranties from the EPC for the installation are typically
given for a period from 18-24 months, whilst the manufacturer
warranties for the panels, inverter and system parts are given
for 5 years.

24 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2a – Contracting under the SOM

Checklist 5 – Key Elements of EPC Contracts (cont.)

Criterion Assessment

Subcontracting 9 Description of which phases/parts of the constructions/

installation shall be subcontracted. All potential sub-contracts
must be mentioned in the contract.
9 Subcontractors must adhere to the same standards as the
EPC Contractor.
9 The EPC Contractor should be held responsible for all acts
and omissions of subcontractors.
9 The FO should secure the assignability of Subcontractor
warranties and licenses, provided by the Subcontractors to the
EPC under the relevant subcontracts. This is recommended
in order to ensure the FO can seek regress for any issues
directly from the Subcontractor. If this is not secured, the FO
would need to raise these issues with EPC Contractor under
the EPC contract for the EPC Contractor to then secure
the Subcontractors’ performance of warranty and license
obligations under the relevant subcontracts.

Pricing and Payment 9 A breakdown of the prices for each phase of construction and
Schedule the corresponding due dates for payments.
9 The payment schedule must be in line with the
construction schedule and can be made contingent on
milestones being met.
9 Advance payments made to the EPC are usually required to be
secured by a bank guarantee. As discussed above, during the
warranty period, a retention (in cash or via a warranty security
in the form of a bank guarantee) is commonly negotiated.

Insurance 9 Responsibilities for insurance coverage of the design and the

works and the extent of that coverage will be divided between
the FO and the EPC Contractor. These responsibilities
will shift depending on the status of the project. The EPC
Contractor will typically obtain and maintain all risk insurance,
work-man compensation and third-party liability insurance
during the installation, construction and commissioning of
the RTS system. The FO should request a copy of all these
insurances policies.
9 The FO will typically obtain and maintain property insurance
for the RTS system once ownership and risk in the RTS
system has passed to the FO.
9 The load bearing capacity of the roof structure is necessary
for getting the project insurance.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 25

3 | RTS Project Development

Checklist 5 – Key Elements of EPC Contracts (cont.)

Criterion Assessment
Contract Duration 9 The contract duration will be either determined by the time
(Term) estimated to design, install and commission the RTS system
(Project Time-line) or can be longer, if the FO chooses to
also enter into an O&M agreement with the EPC Contractor
(see Checklist 6).
Obligations of 9 The FO must cooperate with the EPC Contractor, facilitate
the FO the smooth operation of the construction process and provide
reasonable site access to the Contractor without substantial
interruption.
9 The FO must hire appropriate staff to carry out the FO’s
responsibilities, such as construction oversight or performance
testing at various stages of construction, to make decisions
and take actions on behalf of the owner on site.
Obligations of the 9 Obligation of the EPC Contractor to submit engineering and
EPC Contractor design plans based on the FO’s requirements for the FO’s
review prior to beginning construction.
9 The EPC must ensure that the necessary permits and
Practical licenses are obtained for the RTS system on behalf of the FO
Insight as part of their services. This includes a construction permit,
Vietnamese if adjustments/modifications to the building/rooftop need to be
laws apply made to install the RTS system (see Stage 4)
strict
regulations with respect to
the use of foreign currency
within the territory of Viet
If both contracting parties are Vietnamese entities, the contract must be
Nam. There is only a
governed by Vietnamese law.
limited number of specific
cases where use of foreign It is possible for a non-Vietnamese entity to provide EPC services in
currency is permitted. In Viet Nam and in this case the parties to the contract may agree to apply
the case of a commercial foreign law and prices can be set in foreign currency (such as Singapore
agreement between two law and USD, respectively). However, for a non-Vietnamese entity to
Vietnamese parties the only provide EPC services for an RTS system project it must obtain a foreign
permitted currency for use contractor permit, establish a project management office in Viet Nam, en-
is VND and prices cannot gage Vietnamese contractors to provide services as local partners, and
refer to foreign currency or register for tax payments in Viet Nam. These requirements are applied
be adjusted in accordance to the non-Vietnamese entity on a “per project basis”. Due to this, it is
with fluctuations in ex- most common for the EPC Contractor for RTS system projects to be a
change rates. The State Vietnamese entity. It is also not uncommon that foreign EPC companies
Bank of Vietnam publishes offer supervision and overall management in cooperation with a local
up to date foreign exchange EPC partner.
rates on their website.

26 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Checklist 6 provides an overview of issues relevant to an O&M service

Stage 2a – Contracting under the SOM

agreement. An O&M service agreement is required whenever the FO
does not want to operate and maintain the RTS system - for a certain
period of time or for the whole duration of the project - but prefers to con-
tract a third party to do so on their behalf. The third party can either be
the EPC Contractor that built the RTS system or it can be another com-
pany that specialises on providing such services. For the first year, the
EPC Contractor may offer free O&M services. A Template O&M Contract
is available for download.

Checklist 6 - Key Elements of O&M Service Agreements

Criterion Assessment

Scope of Services 9 Clear description of the specific duties and responsibilities

of the O&M service provider, typically broken down
into operational services, maintenance services, and
cleaning services.
9 The minimum frequency of cleaning services (cleaning
schedule) can be agreed upfront.
9 Services which fall outside of the scope – and their cost
- should be explicitly mentioned to ensure problems
can be addressed quickly without requiring contracting
negotiations during system downtimes.

System 9 O&M service agreements with the EPC Contractor are

Performance more likely to guarantee performance ratios, which are
Guarantees calculated based on theoretical output and actual output
of the system.
9 O&M service agreements with a third-party are unlikely
to explicitly guarantee performance ratios, as there are
many factors beyond their control which may impact
yield, such as the quality of the EPC contractor’s work.
9 Availability guarantees, where the O&M contractor
guarantees a set percentage of system uptime per month/
year, are more common in O&M service agreements with
a third-party O&M, as they focus on making the best use
of the system.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 27

3 | RTS Project Development

Checklist 6 - Key Elements of O&M Service Agreements (cont.)

Criterion Assessment

Spare Parts 9 The responsibility for purchasing, storing, and installing spare
and Repairs parts can be split between the O&M Contractor and the FO.
9 The EPC Contractor may turn over spare parts to the FO,
who can make them available for use by the O&M Contractor.
9 The FO can be made responsible for the costs of all spare
parts and repairs not covered by manufacturer warranty.
9 The O&M Contractor should regularly report the use of
any spare parts and any repairs made.

Service Fees 9 Fees charged by the O&M service provider for the services
rendered within the scope of services.
9 Fees applicable to optional services that fall out of the scope
of the O&M service agreement, but the FO might want to
make use of eventually.
9 Parties may agree to periodically adjust the fee by a set
percentage amount to account for inflation and/or foreign
exchange rate fluctuations.

Contract Duration 9 The term of the O&M service agreement depends on the
(Term) preference/intentions of the FO.
9 O&M must be planned for the entire lifetime of the system
and it is for the FO to decide whether the O&M shall be done
partially or fully by a third party or whether they want to take
over the O&M responsibility at a certain point in time.
9 Renewal and or termination requirements in O&M service
contracts should give the FO enough lead time to find a new
O&M contractor, if necessary.

Further Obligations 9 The O&M Contractor may also provide ongoing assistance
of the O&M with managing the relationship with EVN in cases where
Contractor excess electricity is being sold to EVN, such as coordinating
bi-directional meter readings.

Further Obligations 9 Provide access to rooftop and to water for operation, cleaning
of the FO and maintenance services.

Step 2a.3 – Contractual Agreements for the Sale of Electricity

The FO may not require consuming all the electricity generated by the
RTS system on-site but choose to sell a portion of the electricity to EVN.

If the FO wants to sell electricity to EVN, they must enter into a Pow-
er Purchase Agreement (PPA) with EVN. The process is described in
Stage 2c - Power Purchase Agreement with EVN and further in Step
6.2 to Step 6.5.

28 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2b – Contracting under the TOM

Stage 2b – Contracting under the TOM

In the Contracting Stage the Facility Owner chooses the party to devel-
op the RTS system installation on their building/facility. The agreement
between a Facility Owner and a Solar Service Provider is formalised
through the signing of a contract.

At the outset, the FO will consider whether the FO will consume any electricity
generated by the third-party owned RTS, in which case the FO will then con-
sider either a direct PPA or solar leasing model of the RTS system, or whether
the FO will simply grant the Solar Service Provider a lease over the FO’s roof-
top for sale of electricity to the PC, for either a fixed rent or a profit share in
the revenues received from EVN. If the FO is uncertain of the benefits of the
various options, the FO can also request the Solar Service Provider to offer
alternatives for the FO’s consideration.

Step 2b.1 – Selection of the Solar Service Company

Based on the offers received, the FO will be able to choose the most
suitable Solar Service Company (SSC) to partner with. Checklist 7
provides a number of useful criteria that can be used to determine
which is the best offer.

Checklist 7 – Best Offer Assessment for SSC

Criterion Assessment

Technical Design 9 List of the attributes of the specifications of the system, including
capacity, modules, inverters, and expected degradation. The FO
should have a clear understanding of what type of system they
would require and take into account any future expansion plans.

Company Profile 9 The more similar systems an SSC is operating successfully, the
and Track Record better the chances that the SSC will deliver the services as per the
agreement with the FO.
9 Check project references provided (call respective facility owners
or visit the sites), whenever possible.
9 Assessment of financial capability / credit check of the SSC.

System Costs 9 As the SSC is making the investment, the system costs are not
really relevant to the FO.
9 However, if the FO has a purchasing option or an obligation to
buy the system (see below) the cost of the RTS system at the
time of transfer should be included.

O&M Costs 9 The O&M costs are fully covered by the SSC and typically
included in the electricity tariff.

Electricity Output 9 Electricity output and pricing considerations depend on the type
and/or Price of contractual agreement with the SSC (see Step 2b.2)

Technical and Administrative Guidelines for Commercial and Industrial Projects | 29

3 | RTS Project Development

Checklist 7 – Best Offer Assessment for SSC (cont.)

Criterion Assessment

Insurance 9 Check that an appropriate insurance coverage will be

procured by the SSC.
9 Check that the coverage and duration of the policy are in line
with the project’s and the FO’s own requirements.

Contract Duration 9 Typically, the contract duration will be 15 to 20 years. In most

(and Transfer of cases, the ownership of the RTS system is transferred to the
Ownership) FO at expiry of the full term for a nominal price.
9 SSC might include in their offer an option or obligation for the
FO to purchase the RTS system after a shorter period (see
Checklists 8, 9 and 10).

Step 2b.2 – Contractual Agreement with the Solar Service Company

A described in Step 1.3, in the TOM the RTS system is owned by the SSC.
The FO permits the SSC to install the RTS system on its rooftop space
and the FO may also agree to purchase part or all of electricity from the
SSC for a negotiated price. Under the TOM, the SSC will provide EPC ser-
vices and O&M services itself or engage a subcontractor for this purpose.
Therefore, the FO will not enter into any EPC contract or O&M service
agreement under the TOM.

In Viet Nam, there are three main types of contractual agreements an SSC
and the FO could enter into:

y Solar Lease Agreement

y Private Power Purchase Agreement (Private PPA)

y Rooftop Lease Agreement

The Solar Lease Agreement (see Figure 10) has been the most wide-
spread type of agreement in Viet Nam in the past, primarily because a
private PPA was not recognised by the legal framework until PM Decision
13/2020 came into effect in April 2020. Under this type of con-tract, the
SSC installs an RTS system on a roof of the FO’s facility. The SSC is
the owner of the system and leases it to the FO on an operational basis.
Therefore, the FO is considered to be the electricity generator for regula-
tory purposes. During the lease period, the FO pays the SSC a monthly
fee, based on the electricity generated by the RTS system. The FO may
enter into a PPA with the PC (EVN) to sell excess electricity that is not
consumed (see Step 2b.3). The SSC provides maintenance services and
may either include such services under the monthly rental fee; or charge
a fixed or variable service fee.

30 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Figure 9 – Solar Lease Agreement

Stage 2b – Contracting under the TOM

LEASE of RTPV SYSTEM

Sale of Surplus
Electricity
SSC
Lease of RTS System EVN
FO
Rooftop Owner
Self-Consumption
of Electricity
Payment

At the end of the 15-20-year contract period, the SSC transfers the RTS
system to the FO for a nominal price.

It is possible that an RTS system leasing arrangement – if not well struc-

tured - could be considered a financial leasing arrangement under Viet-
namese law. This would require further licenses and stricter conditions
would apply to the SSC, effectively requiring it to be a licensed credit in-
stitution. Therefore, it is important that the lease agreement is structured
in a way that it does not fall under the definition of a financial leasing
arrangement under Vietnamese law. Checklist 8 provides an example of
how such an agreement could be structured and an example of a Solar
Lease Agreement is available for download.

Checklist 8 – Key Elements of a Solar Lease Agreement

Criterion Assessment

Description of the 9 Technical description of the RTS system, attributes of the

RTS system and location, hardware for installation, and associated connections
the Works thereto, as per accepted offer.

System 9 Yield guarantees may be used to ensure a certain level of output

Performance by the RTS system. The FO may require the SSC to pay penalties
and Yield for the system failing to meet the minimum yield guarantee, or they
Guarantees may have the option of terminating the agreement if the threshold
is not met for a certain period of time.

Duration of the 9 15 - 20 years

Contract 9 To avoid falling under the financial leasing category under
Vietnamese law, it is recommended to split the total lease contract
into an operational lease period (of e.g. 8 years) and a benefit-
sharing period (e.g. remaining 12 years).
9 During the lease period the FO leases the RTS system from the
SSC and purchases the system from the SSC at expiry of the
lease period (as discussed below).

Technical and Administrative Guidelines for Commercial and Industrial Projects | 31

3 | RTS Project Development

Checklist 8 – Key Elements of a Solar Lease Agreement (cont.)

Criterion Assessment

Duration of the 9 During the benefit-sharing period the ownership of the RTS
Contract system has passed to the FO and the SSC remains as an O&M
service provider sharing in the revenue/savings generated by the
RTS system.

Lease Period 9 The RTS system is leased on an operational basis to the FO and
Fees the FO pays a monthly rental fee to the SSC, based on electricity
generated by the RTS system (possibly with a discount compared
to the tariff of EVN).
9 The monthly leasing fee should be structured so that over the
lease period the SSC recovers approximately 80% of its in-
vestment, as full 100% recovery under a leasing arrangement
would conflict with the restrictions on financial leasing.
9 If the FO sells electricity to EVN, any sale of surplus electricity
to EVN may be passed on to or shared with the SSC under this
model to allow for a shorter payback period. Alternatively, the
monthly rental fee may be based on a ‘take or pay’ arrangement
where the FO’s monthly rental is based on all electricity generated
by the RTS system regardless of whether consumed or not, and in
such case the FO may solely benefit from the sale of any excess
electricity to EVN to off-set its monthly rental portion paid against
electricity it did not consume.
9 If the FO is unable to consume electricity generated (e.g. during
periods of suspension of its manufacturing operations) and has
not entered into a PPA with EVN, the FO may nevertheless be
responsible to pay leasing fees based on the deemed generation
capacity of the RTS, if the responsibility for the inability to off-take
the system output lies with the FO.
9 The parties may agree an additional fixed/variable monthly
service fee in consideration of maintenance services performed
by the SSC during the leasing phase.

Benefit-Sharing 9 The SSC acts as an O&M service provider in this period (as
Period Fees ownership of the RTS system will have passed to the FO) and so
will receive monthly service payments from the FO. This could be
a fixed service fee or based on electricity generated by the RTS
system (possibly with a discount compared to the tariff of EVN as
during the lease period).
9 Additionally, the SSC may share in any revenue received by the
FO under the PPA with EVN for sale of excess electricity if this
applies to the particular RTS system.

32 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2b – Contracting under the TOM

Checklist 8 – Key Elements of a Solar Lease Agreement(cont.)

Criterion Assessment

Purchase 9 At the end of the agreed lease period the title to the RTS system
Option and/or will pass to the FO.
Obligation 9 The FO would need to purchase the system at a fair market
value of the RTS system at the time of sale to avoid triggering
financial leasing issues by transfer at nominal price on expiry of
the lease.
9 Instead of having to pay the purchase price at that time the FO
may pay it off in monthly instalments during the benefit-sharing
phase. The monthly instalments of the purchase price may be al-
located from the monthly maintenance service fee by adjusting
the consumption fee rate accordingly.
9 Leasing agreements may also include an obligation to purchase
the RTS system, in particular, if the FO is in breach of their
obligations to the SSC (who is usually unable to reuse the
system for a different customer or only at a substantial cost for
the relocation and re-specification of the system to a different
site. These clauses should be checked carefully to avoid that the
FO is suddenly faced with the obligation to take the RTS system
off from the SSC at significant cost.

Penalties for 9 Typically, the SSC will ask for penalties to be applied for late
Breach payment of fees by the FO. This may be an interest applied on
any late payments and is capped at a maximum of 20% per
annum under Vietnamese regulations.
9 In addition, as the SSC will make a significant upfront investment
for the RTS system based on the understanding it will have a 15
to 20 year contract with the FO, the agreement will likely include
penalties payments in case the FO breaches the agreement
causing early termination. These may include indemnity for
losses incurred by the SSC and possibly forced purchase of the
RTS system by the FO at an agreed price.
9 As discussed above, the FO may seek to apply penalties on the
SSC for failure of the RTS system to meet guaranteed electricity
outputs. This is less typically seen, as the fees paid to the SSC
are usually linked to the electricity generation of the RTS system
meaning the SSC is incentivised to ensure the RTS system
generates as much electricity as possible and would already be
penalised by receiving reduced fees if it does not.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 33

3 | RTS Project Development

Checklist 8 – Key Elements of a Solar Lease Agreement(cont.)

Criterion Assessment

Obligations 9 The FO must cooperate with the SSC and provide reasonable site
of the FO access to the SSC without interruption to enable the SSC to be
able to effectively perform the services.
9 The FO must obtain insurance in respect of the building / rooftop
(although the obligation to insure the system remains with the SSC).

Further 9 The SSC will typically also provide ongoing assistance with dealing
Obligations of with EVN if excess electricity generated by the RTS system is
the SSC being sold to EVN, such as coordinating connection to the grid and
ongoing bi-directional meter readings.
9 The SSC must provide and commit to comply with health,
safety and environmental standards given that activities are
carried out at height.

The Private Power Purchase Agreement (Private PPA) is usually

signed when the FO purchases – partly or fully - the electricity generated
by the SSC from an RTS system installed on the FO’s rooftop space (see
Figure 10). A Private PPA mainly determines the technical requirements
for the RTS, the amount and price of the electricity the FO will purchase
from the SSC and other common terms as outlined in Checklist 9. There
is no mandatory/standard template for a Private PPA, however a Template
Private PPA is available for download. If any fraction of the electricity gen-
erated shall be sold to the PC, the SSC must organise the grid-connection
of the RTS system and a Power Purchase Agreement (PPA) with EVN
(see Step 4.2 and Steps 6.2 to 6.5).

Figure 10 – Private Power Purchase Agreement

Sale of Surplus
Electricity
SSC PPA with EVN
EVN
Private PPA with FO
FO
Self-Consumption
Payment of Electricity

34 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2b – Contracting under the TOM

Checklist 9 – Key Elements of a Private PPA where the
SSC Sells Electricity to the FO

Criterion Assessment

Description of 9 Technical description of the RTS system, attributes of the

the RTS System location, hardware for installation, and associated connections
and the Works thereto, as per accepted offer.

System 9 Yield guarantees (annual) may be used to ensure a certain

Performance level of output by the RTS system. The FO may require
and Yield the SSC to pay penalties for the system failing to meet the
Guarantees minimum yield guarantee, or they may have the option of
terminating the agreement if the threshold is not met for a
certain period of time.

Payment 9 Payment is based on scheduled readings of the meter

Conditions installed at the delivery point.
9 Private PPAs may be based on a take-or-pay clause, which
requires the FO to pay for all energy generated by the facility,
regardless if the FO does not consume all of the energy
generated. The FO could consider pursuing a grid connection to
sell unconsumed energy under a PPA with the PC (EVN) – see
Stage 2c and Step 6.2 to Step 6.5.
9 The SSC may require a payment security or an advance
deposit in the amount of three to nine months of expected
monthly revenues from the sale of electricity, or a bank
guarantee or letter of credit instead.

Duration of the 9 The duration of the Private PPA should ideally align with the
Agreement expected productive lifespan of the RTS system and/or the
duration of the lease agreement. Typically, in Viet Nam the term
of a Private PPA will be 15 to 20 years.
9 If the terms are of a length that requires renewal and extension,
the notice period for intending to withdraw from the contract
should provide adequate notice to both parties to ensure that
they can prepare.

Purchase 9 At the end of the Private PPA, the FO may have the option to
Option and/or purchase the RTS system from the SSC. The price is usually
Obligation at nominal value for a transfer of ownership at expiry of a long
term Private PPA.
9 In some cases the FO will have the option to purchase the RTS
system after a number of years into the Private PPA and the price
in this case would be based on a formula developed to take into
account the degradation of the RTS system and other factors,
including upfront investment by SSC (generally discount to future
cash flow for the remaining period of Private PPA). The FO will be
responsible to notify the SSC within an adequate time period if it
wishes to exercise its option to purchase the RTS system.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 35

3 | RTS Project Development

Checklist 9 – Key Elements of a Private PPA where the

SSC Sells Electricity to the FO (cont.)

Criterion Assessment

Purchase 9 Contracts may also include an obligation to purchase the RTS

Option and/or system in particular, if the FO is in breach of their obligations to
Obligation the SSC (who is usually unable to reuse the system for a different
customer or only at a substantial cost for the relocation and re-
specification of the system to a different site). These clauses
should be checked carefully to avoid that the FO is suddenly
faced with the obligation to take the RTS off from the SSC at
significant cost.
9 The SSC shall ensure that the Purchase Price by FO meets
their expected return on investment. One option is to specify,
upfront, the purchase price for each year over the duration of
the Agreement.

Penalties for 9 Typically, the SSC will ask for penalties to be applied for late
Breach payment of fees by the FO. This may be an interest applied on any
late payments and is capped at a maximum of 20% per annum
under Vietnamese regulations.
9 In addition, as the SSC will make a significant upfront investment
for the RTS system based on the understanding it will have a 15
to 20 year contract with the FO, the agreement will likely include
penalty payments due if and when the FO breaches the agreement
causing early termination. These may include indemnity for losses
incurred by the SSC and possibly forced purchase of the RTS
system by the FO at an agreed price.
9 The FO may seek to apply penalties on the SSC for failure of
the RTS system to meet guaranteed electricity outputs. This
is less typically seen as the fees paid to the SSC are usually
linked to the electricity generation of the RTS system meaning
the SSC is incentivised to ensure the RTS system generates as
much electricity as possible and would already be penalised by
receiving reduced fees if it does not. It is preferable to state the
anticipated generation and guaranteed generation for each to
avoid any ambiguity.

Obligations of 9 The SSC will have a lease of the rooftop or license to occupy as
the FO part of the Private PPA arrangement but the FO must cooperate
with the SSC and provide reasonable access to the building to the
SSC without interruption to enable the SSC to be able to effectively
perform the services.
9 The FO must obtain insurance in respect of the building / rooftop
(although the obligation to ensure the system remains with the SSC).

36 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2b – Contracting under the TOM

Checklist 9 – Key Elements of a Private PPA where the
SSC Sells Electricity to the FO (cont.)

Criterion Assessment

Further 9 O&M services will fall upon the SSC.

Obligations of 9 The SSC must ensure that the necessary permits and licenses
the SSC are obtained for the RTS system on behalf of the FO as part of
their services. This includes a construction permit, if adjustments/
modifications to the building/rooftop need to be made to install the
RTS system (see Stage 4).
9 The SSC will typically also provide ongoing assistance with dealing
with EVN if excess electricity generated by the RTS system is
being sold to EVN by the FO, such as coordinating connection to
the grid and ongoing bi-directional meter readings.
9 The SSC must provide and commit to comply with health, safety and
environmental standards given that activities are carried out at height.

As an alternative to both the Solar Leasing model and the Private PPA
model, a Rooftop Lease Agreement (see Figure 11) is typically signed
when the SSC only leases the rooftop from the FO to install an RTS sys-
tem but intends to sell all the electricity produced to the Power Company
EVN, i.e. the FO does not purchase any electricity from the SSC. The SSC
may offer the FO either a profit share from the sales to the PC or a fixed
rent per month or per year for the entire term of the agreement. Under this
type of contract, the FO may need to provide support to the SSC during
the technical testing and the connection to the grid. The main elements of
a Rooftop Lease Agreement can be found in Checklist 10 and an example
for a Rooftop Lease Contract is available for download.

Figure 11 – Rooftop Lease Agreement

LEASE of RTPV SYSTEM

Lease/ Licence to
Occupy for rooftop for
PPA with EVN
installation of RTS
FO EVN

SSC

Lease or License Payment

Technical and Administrative Guidelines for Commercial and Industrial Projects | 37

3 | RTS Project Development

Checklist 10 – Key Elements of a Rooftop Lease Agreement

Criterion Assessment

Description of the 9 A technical description of the RTS system, attributes of

RTS System and the location, hardware for installation, and associated
the Works connections thereto, may be included for the FO’s
information or for a description of the asset if the Rooftop
Lease Agreement includes the option for the FO to
purchase the system.

Leasing Fees 9 May be fixed (e.g. per m 2 of rooftop leased) or be based

on a share of the revenue generated from the RTS system
Practical under the PPA with EVN.
Insight
Duration of the 9 Typically, 20 years, corresponding to the term of the PPA
By law, a
Contract entered into between the SSC with EVN.
lease of
property
Purchase Option 9 At the end of the lease, the FO may have the option to
is considered real estate
and/or Obligation purchase the RTS system from the SSC. The price is usually
business and the lessor
at nominal value for a transfer of ownership at expiry of a
is required to have the
long-term lease.
registered business line
9 In some cases, the FO will have the option to purchase the
of real estate business
RTS system after a number of years into the lease and the
and a minimum registered
price in this case would be based on a formula developed
charter capital of VND 20
to take into account the degradation of the RTS system and
billion, except in certain
other factors. The FO will be responsible to notify the SSC
cases, e.g. when the FO
within an adequate time period if it wishes to exercise its
is an entity that owns the
option to purchase the RTS system.
property (Law on Real
9 Contracts may also include an obligation to purchase the RTS
Estate Business 2014 and
system, in particular, if the FO is in breach of its obligations to
Decree No.76-2015-ND-
the SSC dis-cussed below. These clauses should be checked
CP dated 10 September
carefully to avoid that the FO is suddenly faced with the obligation
2015). In case the FO does
to take the RTS system off of the SSC at significant cost.
not qualify for the exception
and cannot satisfy condi- Penalties for Breach 9 As the SSC will make a significant upfront investment for the
tions to conduct real estate RTS system and enter into a 20-year contract with EVN for
business (add business the sale of electricity, the lease agreement will likely include
line and have minimum penalty payments in case the FO breaches the agreement,
registered charter capital causing early termination. These may include indemnity for
of VND20 billion), it may be losses incurred by the SSC and possibly forced purchase of
advisable to structure this the RTS system by the FO at an agreed price.
as a ‘license to occupy.’

As both contracting parties will typically be Vietnamese entities, all these

types of agreements must be governed by Vietnamese law. Foreign
companies wishing to act as SSC in Viet Nam, are required by law to be
physically present in Viet Nam by establishing a duly licensed Vietnamese
entity for this purpose.

38 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 2c - Power Purchase Agreement with EVN

Stage 2c - Power Purchase Agreement with EVN

Both under the SOM and the TOM, a Power Purchase Agreement with EVN
will be required if any of the generated power is to be fed to the grid.

A Standard PPA for selling electricity to EVN is mandatory as per MOIT Circu-
lar 18/2020. that followed PM Decision 13/2020 and replaced MOIT Circular
16/2017. Amendments or supplementation of the Standard PPA will only be
possible to a very limited extent.

Signing a PPA with and effectively selling electricity to EVN requires a series
of Steps throughout the RTS project development process. Figure 12 pro-
vides a holistic overview of the process with EVN.

Figure 12 – Process to Obtain a PPA and sell Electricity to EVN

Responsible Processing Flowcharts

parties time
The Project
Owners
03 Register their
needs to install
days prior to
the RTS system
the tentative
installation
completion Negotiate
Survey and
date Grid connecting with the
negotiation of the conditions is
Subsidiary owners
Power 01 grid connection not ensured
to select the
Companies/ working day appropriate
Units option
Grid connection
condition is ensured

The Project Invest

Owners in the project

Submit the dossiers to

The Project request power sales
Owners from the RTS system

Practical
Insight
Subsidiar- Subsidiary
Power
01 Check the
Notify the
owners to
ies of EVN working day project technical Not pass
Companies/ take remedial
specifications
are avail- Units actions

able to provide adviso- Pass

ry on grid-connection
matters via their local
Subsidiary
Power
02 Install two-way
meters and sign
working days
contact numbers. EVN’s Companies/ the PPAs with
Units the owners
Customer Service Call
Centre can also be con-
tacted under 1900-1006
The Grid Connection Approval by EVN should be optimally procured at an
or 1900-9000.
early project development stage, i.e. before starting the construction phase,
as described under Step 2c.1 below. Then, during the commissioning of the
RTS system, the process for signing the PPA and starting to sell electricity to
EVN is concluded, as described in Steps 6.2-6.5.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 39

3 | RTS Project Development

2c.1 - Grid Connection Approval

If any portion of the electricity produced by the RTS system shall be sold
to the PC – whether under the SOM or the TOM Model - it is highly rec-
ommended to approach the PC/EVN at an early stage, i.e. before starting
the investment-intensive Stage 5 – Procurement, Construction and Instal-
lation to obtain Grid Connection Approval, which significantly improves the
risk profile of the project and can be beneficial, e.g. in the negotiation of
a bank loan (see Step 3.2). Figure 13 provides an overview of the grid
connection approval process.

Figure 13 – Grid Connection Approval Process

Rooftop solar PV project site project Technical Specfications
RTPV Capacitiy RTPV Capacitiy

PPA Solar Agrement

01 02 03 04
EVN EVN
FO/SCC FO/SCC FO/SCC
Request for Grid Check of the
Grid Connection Project Signing of
Connection Feasibility Technical the PPA
Approval Survey Specifications

The FO/SSC can submit a “Request for Grid Connection Approval” for the
RTS system in question. The request should be sent to the customer ser-
vice centres of the local Power Companies via phone, email, or Zalo or
Chat Box Apps, and should include the following basic information:

y Rooftop solar PV project site(s)

y Planned installed capacity
y EVN customer code (if applicable)
y Under the TOM, the SSC must also submit a copy of the agreement with
the FO (Private PPA, Solar Lease Agreement or Rooftop Lease Agreement).

EVN will in turn organise a site inspection to conduct a “Grid Connection Fea-
sibility Survey”. An important precondition for obtaining the Grid Connection
Approval is that the design and other relevant aspects of the system comply
with grid-connection requirements. The grid connection requirements depend
on the intended installed capacity of the RTS system and the conditions and
process are set out in Circular 39/2015/TT-BCT, Circular 30/2019/TT-BCT,
EVN Guidelines 1532/EVN-KD, and Circular 18/2020/TT-BCT.

The PC must notify the FO/SSC about the outcome of the Grid Connection
Feasibility Survey and any other relevant issues in written form. If the grid
connection point where the RTS system is supposed to be connected can-
not absorb the additional capacity of the RTS system, the Request for Grid
Connection may be rejected. If the surveys outcome is satisfactory, the PC/
EVN issues a Grid Connection Approval to the FO/SSC. The Grid Connec-
tion Approval document may contain additional conditions the system may
have to comply with when commissioned, as a result of the feasibility survey.

The grid connection and the signing of the PPA take place at Stage 6 –
Commissioning and (Grid) Connection.

40 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 3 – Financing

Stage 3 – Financing
In the Financing Stage, the Facility Owner determines the best in-
A Financial Model
vestment structure for financing the RTS system. This Stage is rele-
is a mathematical
vant only for the Self-Ownership Model. In the case of a Third-Party
model designed
Ownership Model, the SCC is in charge of structuring the financing
to represent the
of the project.
performance
of a project or
Step 3.1 – Development of a Financing Model
an investment.
Building such a
A Financial Model is a mathematical model designed to represent the perfor-
model helps to
mance of a project or an investment. Building such a model helps to determine
determine the
the most suitable investment structure, including – for instance – the optimal
most suitable
mix between equity and loans to finance the project. Usually, the financial mod-
investment
el is part of the feasibility study (see Step 1.5). The financial model will help
structure, including
to determine the best financing structure for the project, including the optimal
– for instance –
equity-loan mix. A typical equity-loan ration lies at 30-70%. When applying for
the optimal mix
a loan, the bank may require seeing the project’s financial model and technical
between equity
feasibility study.
and loans to
finance the project.
Step 3.2 – Obtaining a Bank Loan

As RTS systems are usually a relatively small investment, most banks will
issue loans not on a project base but rather on a balance sheet base, which
includes all of the company’s assets. In this case, the bank providing the loan
will accept other collaterals than the RTS system.

Practical A few banks in Viet Nam also provide project-based loans for RTS, where
Insight the RTS itself is accepted as collateral. They will typically expect to see the
A number following documents:
of banks
in Viet y Company Records
Nam are willing to offer
bank loans to develop ◊ Legal identity (Business Registration Certificate, Company Charter,
RTS projects. The size Representative, Address)
of the loan offered will ◊ Business records (Financial statements, accounting balance sheet,
differ from bank to bank and some in-voices or contract/credit agreements to prove compe-
and interest rates lie be- tence)
tween 10-12%. For ex-
ample, HDBank offers a y RTS System Records
credit line for up to 70%
of the investment cost ◊ Estimated capacity, technical specifications of photovoltaic panels, pa-
(using kWp as a basis), rameters of AC converters
with flexible loan terms ◊ FS or estimated budget breakdown
of up to 120 months (10
years). The bank will y Relevant Contracts
typically take security
over the RTS system ◊ Construction/EPC contract with the EPC Contractor
and the cash flow from ◊ Grid Connection Approval or PPA (if available)
the EVN PPA. ◊ Where applicable: Rooftop Lease, Solar Lease or Private PPA

Technical and Administrative Guidelines for Commercial and Industrial Projects | 41

 3 | RTS Project Development

y Other Documents

◊ If the land use rights, factory or building (where an RTS system is lo-
cated) has been mortgaged to another bank, a confirmation letter from
the respective other bank, confirming that the RTS system is excluded,
is required.

Next to commercial banks, some investment funds may also provide funding
for RTS projects. In comparison with bank loans, such cooperation agree-
ments with investment funds may be simpler. However, investment funds may
be at greater risk and may require higher returns with shorter payback times.

Stage 4 – Permits and Licenses

In this stage, the Project Owner engages with relevant national author-
ities to obtain permits and licenses necessary to build and operate the
RTS system in compliance with regulations.

Step 4.1 Permit and License Requirements

In Viet Nam, the installation and operation of an RTS system requires the
following permits:

y Construction and Modification Permit

y Certificate of Eligibility for Fire Prevention and Fire Fighting
y Certificate of Business Registration
An RTS system
Under the SOM, the EPC Contractor is typically in charge of carrying
is considered
out any structural modifications and supporting the FO in getting the
‘construction works’
necessary construction permit should this be required. Under the TOM,
under the Law on
this responsibility might fall on the FO or on the SSC, depending on the
Construction and a
contractual arrangements.
construction permit is
required Step 4.2 to Step 4.4. Provide more details on each of the permits listed
above.

42 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Step 4.2 – Construction Permit

Stage 4 – Permits and Licenses

An RTS system is considered ‘construction works’ under the Law on Construc-
tion and a construction permit is required, as per MOC Circular 15/2016/
TT-BXD, unless it falls into one of the cases of exemption under Article 89.2
of the Law on Construction. Whether the permit is required, or the exemption
applies must be confirmed by the Provincial Department of Construction or
the People’s Committee at district level, who are also responsible for issuing
the construction permit.

It is possible that the RTS installation falls into the already existing construc-
tion permit issued for the building on which it shall be installed, provided that
the already permitted parameters for the building allow it.

If the building requires structural changes, e.g. reinforcement of the roof, a

construction modification permit may be required. For FOs that are locat-
ed in industrial zones, a simplified process may apply and only a notification
to the local management board of the industrial zone is then required.

Step 4.3 – Certificate of Eligibility for Fire Prevention and Fire-Fighting

The Certificate of Eligibility for Fire Prevention and Fire-Fighting is a compul-

sory condition for putting a construction work or building into operation, as
stipulated by the Fire Prevention and Fire-Fighting Law, Gov Decree 79/2014/
An important ND-CP and MPS Circular 66/2014/TT-BCA.
precondition for
For an existing building, the FO still has to submit an application to the Fire
obtaining the Grid
Prevention and Fire-fighting Police to have confirmation of eligibility. However,
Connection Approval
the procedure will be simple if the design of the building is not changed.
is that the design and
other relevant aspects In case there is any change in the design (e.g. modifications to the roof to
of the system comply better support the RTS system) of an existing building or if a new building is
with grid-connection erected on which an RTS system shall be placed, the FO must submit at the
requirements. Fire Prevention and Fire-fighting Police a request for appraisal of fire-fighting
and prevention eligibility of the design to be issued a Certificate of Eligibility
for Fire Prevention and Fire-Fighting.

Step 4.4 - Certificate of Business Registration

The requirements for business registration / enterprise registration certificate

are set out in the Law on Enterprises and detailed by the Government Decree
78/2015/ND-CP and MPI Circular 20/2015/TT-BKHDT.

Any company intending to build a new facility in their line of business that also
intends to install an RTS system to do business in the solar energy sector
should specify this business activity when first requesting the Business Reg-
istration Certificate.

Existing businesses may not be required to register a new business activity,

but it is recommended to check with the relevant local authorities whether an
adjustment of the existing business registration certificate should be carried
out to include the relevant additional business lines for the proposed new
activity in the energy sector.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 43

3 | RTS Project Development

Stage 5 – Procurement, Construction and Installation

In this Stage, the RTS system components are procured, necessary con-
struction works are carried out and the RTS system is installed on the roof-
top of the building/facility. Once the system is in place, a test protocol is
performed to determine whether it performs according to expectations. The
FO has mainly an observation/supervisory role in this process.

Step 5.1 – Site Preparation

Before the EPC Contractor/SSC can start the construction and installation of
the RTS system, the FO must ensure that appropriate access to the premises
is granted, as well as to use facilities (e.g. parking, storage, etc.) and utilities
(e.g. electricity, water, etc.) as agreed in advance. The FO must ensure that
all obstacles at the installation site – on the rooftop and all access points - are
cleared before the start of the works. Checklist 11 provides a list of items that
should be agreed upon with the EPC Contractor or SSC in advance, before the
construction teams arrive at the site.

Checklist 11 – Site Preparation

Item To be agreed

Access to the 9 Are there any security/identification procedures that need to be

Site followed (e.g. at the premises such as registration of personnel,
issuance of visitor ID, etc.)?
9 What are the permitted times to work at the site?

Use of 9 Which access points shall be used for electricity?

Electricity 9 How much consumption is allowed? Will this be unlimited or capped
at certain kWh/month?
9 Will consumption be charged or be at no cost?

Use of Water 9 Which access points shall be used for water?

9 How much consumption is allowed? Will this be unlimited or capped
at certain m3/month?
9 Will consumption be charged or be at no cost?

Use of Other 9 Which areas can be used for loading/unloading?

Facilities 9 Which areas can be used for storing equipment and other material?
9 Is temporary office space needed/available?
9 Are designated parking areas needed/available?
9 What sanitary facilities can be accessed by construction workers?

Health and 9 Which H&S requirements of the facility must be met by the
Safety (H&S) construction workers (e.g. mandatory use of personal protection
Requirements equipment, safe behaviour, etc.)?

Environmental 9 Which Environmental requirements of the facility must be met by

Requirements the construction workers (e.g. wastewater discharge, dust and noise
mitigation, etc.)?

44 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Step 5.2 – Procurement, Construction and Installation

Stage 5 – Procurement, Construction and Installation

An internal testing
on the RTS system is For the SOM, the the EPC Contractor is responsible for procurement of all
conducted to ensure components, construction and installation of the RTS system.
that all components
For the TOM, the SSC is responsible for the procurement of all components,
and the system are
construction, and installation of the RTS system. Usually, they sub-contract
in accordance with
an EPC Contractor to do these activities and in this case the SSC as owner of
the original design,
the RTS system would oversee and supervise the construction work carried
can be operated
out by the EPC Contractor. Therefore, the Facility Owner does not have to
properly and can
actively engage in the construction works.
begin generating
electricity under However, when possible, it is recommended both under the SOM and the
normal operation TOM model that the FO assigns a staff or contracts a third-party consultant
conditions. to oversee and supervise the construction. The level of engagement of this
resource should be higher under the SOM than under the TOM model, but
having a designated resource overseeing the works on behalf of the FO is
helpful to ensure that all procured components meet technical requirements
and comply with standard or good engineering practices, the installations are
done properly, time-lines are kept, and, in general, the coordination between
the FO and the EPC/SSC requirements is smooth.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 45

 3 | RTS Project Development

Stage 6 –Commissioning and (Grid) Connection

In this stage the installed RTS system is tested to determine whether
it is functioning and performing as expected and upon satisfactory
results it is connected to the grid and put into operation.

Step 6.1 – Internal Testing

Upon completion of the construction and installation stage, an internal test-

Upon completion of ing on the RTS system is conducted to ensure that all components and the
the construction and system are in accordance with the original design, can be operated properly
installation stage, an and can begin generating electricity under normal operation conditions. It
internal testing on is also to ensure that all further construction / installation works have been
the RTS system is properly done. It is recommended that the internal testing is not conducted
conducted by the same EPC (sub-) contractor but rather by an external party contract-
ed by the FO/SSC, to ensure that the work delivered by the EPC contractor
is of good quality.

Checklist 12 provides a list of the elements that are typically included in the
internal testing protocol.

Checklist 12 – Internal Testing

Item To be agreed

Component 9 Are individual components functioning as expected and according

Testing to agreed specifications?

System Testing 9 Is the system (all components together) functioning as expected

and according to agreed specifications?
9 Does the RTS system meet the performance guarantee levels (if
applicable)?

Compliance 9 Do the installations and infrastructure comply with the required

with Standards quality standard?

Safety 9 Are all safety devices working properly?

9 Can the RTS system be commissioned in complete safety?

Under a model that does not foresee any sales of electricity to the PC, the
RTS system can begin to operate after the testing procedures have been
completed successfully and with satisfactory results (see Stage 7 – Opera-
tion and Maintenance).

If the FO or SSC plan to sell electricity to the PC (EVN), they must follow
a grid-connection procedure before the PPA with EVN can be signed. This
procedure is started at Step 4.2 and continues with Step 6.2 to Step 6.5.

46 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Step 6.2 – Request for Grid Connection

Stage 6 –Commissioning and (Grid) Connection

Once the internal testing has been completed successfully and with satisfac-
tory results, the next step is to ensure grid connection of the project and sales
of electricity to EVN.

03 days prior to the tentative installation completion date, the project owner
shall submit a dossier of proposal for electricity sale to the PC, including:

y An official request letter for electricity sale (see form BM.01 in Figure 14
and the template in EVN Guidelines 1532/EVN-KD)

y A technical dossier: specifications, COs, CQs of solar panels and inverters

and minutes of parameter testing in line with the applicable regulations
carried out by a competent unit.

Figure 14 – Official Request Letter for Electricity Sale from RTS

Practical
Insight
During
the O&M
phase
EVN may conduct
regular inspections and
conduct quality tests
in accordance with
MOIT Circular 39/2015/
TT-BCT and Circular
If the FO does not engage a competent unit to conduct the parameter testing,
30/2019/ TT-BCT on the
EVN unit will conduct these tests (see Step 6.3).
distribution system. If
the RTS system does
EVN or a qualified entity will review all submitted documents and schedule
not comply with the
an on-site inspection, including system parameter testing if the project owner
required quality, pen-
chooses not to engage an agency to conduct this (see Step 6.3).
alties may apply or the
equipment may be even
Step 6.3 – Inspection by EVN
disconnected.

Within 3 days from the receipt of a proposal for electricity sale, the PC in
charge shall complete parameter testing. This inspection is done to confirm

Technical and Administrative Guidelines for Commercial and Industrial Projects | 47

3 | RTS Project Development

that the RTS system meets grid connection requirements, as per the grid con-
nection approval conditions (see Step 4.2). If a parameter test has not been
conducted before the request for registration of the grid connection (see Step
6.2), EVN may conduct a parameter test during this inspection. The grid con-
nection requirements depend on the intended installed capacity of the RTS
system and the conditions and process are set out in MOIT Circular 39/2015/
TT-BCT, MOIT Circular 30/2019/TT-BCT and EVN Guidelines 1532/EVN-KD
Practical
on implementation guidelines with Rooftop Solar projects, 27 March 2019 and
Insight
MOIT Circular 18/2020/TT-BCT.
Training
for the
If the RTS system meets the requirements, EVN confirms the agreement to
Facility
purchase electricity from the RTS system (Step 6.4).
Owner’s staff on O&M
can be integrated in
If, the RTS system does not meet the required specifications, EVN will issue
the EPC Contractor’s
an official letter to the FO to advise on the remedial actions to take to ensure
contract. During the
the RTS system can pass the requirements and electricity can be sold to EVN
time the EPC contractor
from the system.
is in charge of O&M
(2-3 years), they can
Step 6.4 – Signing of PPA
provide on-the-job
training to staff, which
Upon a successful inspection by EVN, the next steps consist of signing the
can then take over the
Power Purchase Agreement with EVN (in many cases, the PPA signing can
O&M, once the service
also follow after grid connection and commissioning of the system).
contract with the EPC
contractor expires.
The PPA will include the following key provisions:

y The FIT to be applied for a period of (up to) 20 years from the applicable
commercial operation date.
y The formula for calculating the electricity generated and price to be paid
to the seller.
y Penalty interest payable by EVN on any late payments at the applicable
interest rate of one month as announced by the State Bank of Viet Nam at
the time when EVN makes payment.

The PPA follows a predefined template which was officially issued by the Min-
istry of Industry and Trade in July 2020 and is attached as an annex to MOIT
Circular 18/2020 supplementing PM Decision 13/2020.

If all technical requirements are not satisfied, the PC will not enter into a PPA.
Remedial actions may be proposed, to allow for submitting a new proposal
for electricity sale.

Step 6.5 - Grid Connection

After the signing of the PPA, EVN replaces the 1-way meter with a bi-direc-
tional meter. The bi-directional meter enables the recording of the amount of
electricity fed from the national/EVN grid into the premises of the FO and at
the same time measures the amount of electricity from the RTS system fed
into the grid (see above comment: in many cases, PPA signing follows grid
connection and commissioning).

48 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 7 – Operation and Maintenance

Stage 7 – Operation and Maintenance

In this stage the installed RTS system is fully operational and generates
electricity for self-consumption and/or sales. This stage can last up to
25-30 years until the end of the system’s lifetime. During this stage, reg-
ular maintenance needs to be conducted to ensure that the RTS system
can operate smoothly for the duration of its lifetime

Step 7.1 – O&M Provisions and Resources

For the SOM, the EPC Contractor typically offers operation and maintenance services
for a predefined period (usually the first 2-3 years) after the system is commissioned.

The scope of the O&M services to be provided by the EPC Contractor are
usually agreed upon early on in the project and form part of the contract (see
Stage 2 - Contracting). For the duration of the O&M service contract, the FO
must ensure that the EPC contractor fulfils their responsibility.

After expiry of the O&M service period with the EPC contractor, the FO may take over
O&M services itself or engage a third party to provide O&M services for the RTS system.

If the FO engages a third party to provide the O&M services, this would be
under a separate O&M contract with terms as presented in Stage 2 - Con-
tracting A Template O&M Contract is available for download.

If the FO takes over responsibility for the O&M of the RTS system itself, it
must make sure that the necessary resources to carry out all O&M related
tasks are in place for smoothly taking over responsibility after the O&M
service contract with the EPC Contractor has expired. This can be done
either by recruiting specialised staff (such as an external expert or new staff
members) or by training existing staff. If the FO plans to assign existing
staff to perform O&M of the RTS system, it should optimally appoint the
appropriate person early on - i.e. at the time the system is installed - so
that person can already start building expertise before taking over the task fully.

Checklist 13 provides a list of topics that should be covered in a professional

training for RTS system O&M:

Checklist 13 – Training Topics for RTS System O&M

RTS O&M Topics

9 Fundamentals of Solar PV Systems

9 Overview of the specific RTS systems (i.e. component, rated capacity, and other
parameters, review of single line diagram, etc.)
9 Safety considerations when working with a PV system (i.e. risk associated with PV
system operation, etc.)
9 Routine inspections / performance monitoring (i.e. understanding of system parameters, etc.)
9 Use of measurement devices (e.g. clamp meter, etc.) or monitoring systems
9 Preliminary troubleshooting
9 Cleaning of system components
9 Warranty details (conditions, duration period, point of contact)

Technical and Administrative Guidelines for Commercial and Industrial Projects | 49

3 | RTS Project Development

In the case of the TOM, the RTS system is owned and operated by the
SSC. Therefore, the FO does not have a direct O&M responsibility.

However, the FO should be able to supervise/assess whether the RTS

installations are operated and maintained properly.

Step 7.2 – Energy Verification and Payment

The energy verification and payment system to be put in place depends

Practical
on who sells/purchases the electricity from the FO or the SSC.
Insight
It is rec-
When the SSC sells electricity to the FO (whether partially or fully) under
ommend-
a Private PPA, a transparent system and process must be put in place
ed that
to ensure an appropriate accounting of units of electricity provided and
key staff are trained
invoiced/paid. The following are some examples of possible methods:
early on in the project
on general and practical
y Cross-checking the amount recorded as generated in the invoice is-
knowledge about the
sued by the SSC with the readings of the power meter at the output
RTS system to facili-
of the RTS system (installed by the SSC) or from monitoring system.
tate coordination and
communication with the
y Cross-checking the amount recorded as generated in the invoice is-
SSC.
sued by the SSC with the readings of the power meter installed in-
dependently by the facility owner at the input to the main distribution
board (please note that the value will not be exact as the power meter
installed at the output of the PV system as there might be some line
loss. However, value reading from the dedicated meter should be in
the same level as the value stated in the bill).

y Comparing the amount recorded as generated in the invoice issued

by the SSC with electricity generation from past months (taking into
consideration weather condition, operation hours of the facility, etc.).
This can give an indicative idea of the accuracy of the invoice if the
amount of electricity recorded is more or less equivalent than that of
previous months.

The measured electricity transferred to the FO must be officially and

clearly invoiced by the SSC and subsequently paid by the FO.

When the SSC or the FO sell the generated power under a PPA with
EVN, they must follow EVN’s verification and payment methods set out
under the PPA as follows:

y Allow the installation of a bi-directional meter – as described under

Step 6.5 - that measures the amount of electricity fed into the prem-
ises of the FO by EVN and the amount of electricity fed out of the
RTS system into the grid. EVN will invoice separately for amounts
consumed from the national grid by the FO’s premises and pay for the
amount fed into the national grid.

50 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

y Agree on a specific day each month, for EVN to come read the bi-di-

Stage 7 – Operation and Maintenance

rectional meter to subsequently issue a meter reading to the SSC or
FO. This happens usually within one business day.

EVN then issues a Confirmation Report on the meter readings (see

Figure 15). The SSC or FO then have one business day to raise any
issues with the meter reading provided by EVN. If no objection is
raised, EVN will proceed to pay for the electricity at the agreed FIT,
as per the PPA.

Figure 15 – EVN Confirmation Report on Meter Reading for RTS

After the signing
of the PPA, EVN
replaces the 1-way
meter with a bi-
directional meter.

Step 7.3 – Transfer of Ownership

This Step is relevant to the TOM only. If the SSC and the FO have agreed
that the RTS system’s ownership shall be transferred from the SSC to the FO
after a certain period of time (see Stage 2b), the transfer process should be
prepared adequately in advance. Checklist 14 provides some key items that
should be taken into account to ensure a smooth transfer of ownership that
does not affect the system’s operation and performance:

Technical and Administrative Guidelines for Commercial and Industrial Projects | 51

3 | RTS Project Development

Checklist 14 – Preparation of the Transfer of Ownership

Item To be agreed

Assignment of 9 Decide whether the FO will be in charge of O&M or whether

the RTS System an external party will be recruited (see also Step 7.1)
Operator

Assessment of 9 Conduct an (independent) inspection of the component

the RTS System and system condition and performance to support planning
Condition of procurement or replacement of certain components, if
necessary.

Preparation of the 9 Adapt the accounting system of the FO to account for the RTS
Accounting System system as an asset of the company.

Monitoring System 9 Ensure that the monitoring process is clear to FO’s responsible
Transfer staff and transfer key information, such as access credentials
and rights for monitoring software.

Engineering 9 Make sure that the SSC has updated all relevant engineering
Documents and documents to ensure that changes that have been done to
O&M Logbook the RTS system over the years (diversions from the original
design) are properly reflected.
9 Ensure that the SSC transfers the O&M Logbook which
captures all maintenance work done on the RTS system
over the years.

Other issues 9 Additionally, the SSC should confirm that there are no
mortgages or other security interests over the RTS system at
the time ownership is transferred to the FO. If there are any
existing mortgages or other security interests over the system,
the SSC must complete steps to have these released and de-
registered before transferring ownership.

52 | Investing in Rooftop Solar Systems in Viet Nam

 3 | RTS Project Development

Stage 8 – Decommissioning

Stage 8 – Decommissioning
This stage consists of dismantling and disposal of the RTS system at
the end of its lifetime.

As the lifetime of Solar PV systems is between 25-30 years, there is limited

experience in Viet Nam (and ever world-wide) with regards to the decommis-
sioning of these systems and no specific polices/regulations and standard
processes are yet in place in Viet Nam.

MOIT Circular 18/2020 replacing MOIT Circular 16/2017 states that the seller
(being the owner of the RTS system) is responsible for clearing, taking down
and returning the site as well as handling all material and equipment of solar
power structures in line with the law (Article 8), but it does not refer to any
specific regulations to be followed other than the applicable laws on environ-
mental protection generally.

At present, only the European Union (EU) has adopted PV-specific waste
Most countries
regulations. Most countries around the world classify PV panels as general
around the world
or industrial waste. Therefore, until there are specific regulations for Solar PV
classify PV panels as
system (component) disposal, the system owners should follow the national
general or industrial
guidelines and requirements for the recycling of electronic waste and general
waste.
industrial waste. These include:

y MONRE Circular 36/2015/TT-BTNMT regulates electronic waste and elec-

tronic devices containing hazardous components (excluding printed circuit
boards which do not contain any components that exceed the threshold of
hazardous waste) are considered as hazardous waste.

y Government Decree 38/2015/ND-CP on Management of Waste and Dis-

carded Materials and Government Decree 40/2019/ND-CP on Amend-
ments to Decrees on Guidelines for the Law on Environment Protection
deal with Disposal of General Industrial Waste.

A publication by IRENA (2016) provides an overview of issues to consider re-

garding the end of life of photovoltaic panels. Furthermore, PV Cycle, a non-
for-profit, member-based organisation offers both collective and tailor-made
waste management and legal compliance services for companies and waste
holders around the world. Thus, PV component manufacturers, retailers, on-
line shops, or importers of solar electronic products and batteries could con-
tact PV Cycle for further information or services.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 53

4
Key References

54 | Investing in Rooftop Solar Systems in Viet Nam

 4 | Key References

Policy, Law and Regulation Documents

Key References
1. Prime Minister (PM) Decision 11/2017/QĐ-TTg on Promoting Solar Power
Development Projects in Viet Nam (Solar FIT 1), dated 11 April 2017 – http://vepg.
vn/wp-content/uploads/2019/02/Decision-11_2017-of-PM-on-solar-PV-FIT_Eng.pdf

2. Prime Minister (PM) Decision 02/2019/QĐ-TTg amending Decision 11/2017/

QĐ-TTg on Promoting Solar Power Development Projects in Viet Nam, dated 8
January 2019 – http://vepg.vn/legal_doc/pm-decision-no-02-2019-qd-ttg-en/

3. Ministry of Industry and Trade (MOIT) Circular 16/2017/TT-BCT on Project

Development and Model Power Purchase Agreements Applied to Solar Power
Projects, dated 12 September 2017 – http://vepg.vn/wp-content/uploads/2019/07/
Circular_16_2017_TT-BCT_EN.pdf

4. Ministry of Industry and Trade (MOIT) Circular 05/2019/TT-BCT amending

Circular 16/2017/TT-BCT on Standardized PPA for Solar Power projects, dated 11
March 2019 – http://vepg.vn/wp-content/uploads/2019/03/MoIT_Circular_5-2019_EN.pdf

5. Prime Minister (PM) Decision 13/2020/QD-TTg on Mechanisms to promote the

development of solar power projects in Viet Nam (Solar FIT 2), dated 6 April 2020 -
http://vepg.vn/wp-content/uploads/2020/04/Decision_13_2020_on_Solar-FIT-2_EN.pdf

6. Ministry of Industry and Trade (MOIT) Circular 18/2020/TT-BCT stipulating

Project Development and Standardized Power Purchase Agreement for Solar
Power Projects, to replace MOIT Circular 16/2017/TT-BCT, dated 17 July 2020 -
http://vepg.vn/wp-content/uploads/2020/08/Circular_18_TT-BCT_EN_final.pdf

7. Ministry of Industry and Trade (MOIT) Rooftop Solar (RTS) PV Promotion

Program – MOIT Decision 23/2023/QD-BCT, dated 5 July 2019 - http://vepg.vn/
legal_doc/moit-decision-2023-qd-bct-en/

8. Ministry of Industry and Trade (MOIT) Circular 39/2015/TT-BCT on Regulations

on Distribution Power Systems, dated 18 November 2015 - http://vepg.vn/wp-
content/uploads/2020/07/39_2015_TT-BCT_296868_EN.pdf

9. Ministry of Industry and Trade (MOIT) Circular 30/2019/TT-BCT on Updated

Regulations on Distribution Power Systems, dated 18 November 2019 - http://
vepg.vn/wp-content/uploads/2020/07/30_2019_TT-BCT_EN.pdf

10. EVN Guidance 1532/EVN-KD for the Implementation of Rooftop Solar Projects,
dated 27 March 2019 - http://vepg.vn/wp-content/uploads/2019/04/1532_EVN_
KD_2019_03_27.EN_Final-002.pdf

11. EVN Decision 373/QĐ-EVN on the Promulgation of the Process for negotiating,
signing and implementing the Power Purchasing Agreement (PPA) for power
projects within Viet Nam Electricity, dated 27 March 2019 – http://vepg.vn/wp-
content/uploads/2019/10/373_QD_EVN_PPA_EN.pdf

12. EVN Guidance 3450/EVN-KD on Settlement of Outstanding Issues on Rooftop

Solar Power, dated 2 July 2019 – http://vepg.vn/wp-content/uploads/2019/07/EVNs-
letter-3450-guiding-solar-rooftop-power-purchase.pdf

13. EVN Guidance 3725/EVN-KD on Contract Signing and Payment of Invoice for
Rooftop Solar Systems Installed after 30/06/2020, dated 1 June 2020 – http://vepg.
vn/wp-content/uploads/2020/07/EVN_3725_EN.pdf

14. EVN Decision 67/QĐ-EVN on Solar Rooftop implementation, dated 28 February

2018 – http://vepg.vn/wp-content/uploads/2020/07/Q%C4%90-EVN-67_E.pdf

15. EVN Northern Power Company (EVN NPC) Letter No. 2274/EVNNPC-KD on Solar
Rooftop implementation in the North of Viet Nam, dated 5 June 2019 – http://vepg.
vn/wp-content/uploads/2020/07/2274_EVNNPC-KD_EN.pdf

Technical and Administrative Guidelines for Commercial and Industrial Projects | 55

4 | Key References

16. Government (Gov) Decree 38/2015/ND-CP on Management of Waste

and Discarded Materials, dated 24 April 2015 – http://vepg.vn/wp-content/
uploads/2020/07/38_2015_ND-CP_EN.doc.pdf

17. Government (Gov) Decree 134/2016/ND-CP on Providing Guidelines for the Law
on Export and Import Duties, dated 1 September 2016 – http://vepg.vn/wp-content/
uploads/2020/07/134_2016_ND-CP_EN.doc.pdf

18. Government (Gov) Decree 78/2015/ND-CP on Enterprise Registration, dated

14 September 2015 - http://vepg.vn/wp-content/uploads/2020/07/78_2015_ND-
CP_EN.pdf

19. Government (Gov) Decree 40/2019/ND-CP on Amendments to Decrees on

Guidelines for the Law on Environment Protection dealing with Disposal
of General Industrial Waste, dated 13 May 2019 – http://vepg.vn/wp-content/
uploads/2020/07/40_2019_ND-CP_EN_full.pdf

20. Ministry of Natural Resources and Environment MONRE Circular 36/2015/

TTBTNMT on Management of Hazardous Wastes, dated 30 June 2015 – http://
vepg.vn/wp-content/uploads/2020/07/36_2015_TT-BTNMT_EN.pdf

21. Ministry of Construction (MOC) Circular 15/2016/TT-BXD on Instructions for

Granting Construction Permits, dated 30 June 2016 – http://vepg.vn/wp-content/
uploads/2020/07/15_2016_TT-BXD_EN_1.pdf

22. Ministry of Finance (MOF) Official Dispatch 1534/BTC-CST on Incentive

Policies for Rooftop Solar Power Projects with Installed Capacity not
exceeding 50 kW, dated 31 January 2019 – http://vepg.vn/wp-content/
uploads/2019/05/20194115852116_1534_BTC_CST_310119_CP_EN.pdf

23. Government (Gov) Decree 79/2014/ND-CP on Implementation, Amending and

Supplementing of Several Articles of the Fire Fighting and Fire Prevention
Law, dated 31 July 2014 - http://vepg.vn/wp-content/uploads/2020/07/79_2014_ND-
CP_EN_1.pdf

24. Ministry of Planning and Investment (MPI) Circular 20/2015/TT-BKHDT on

Guidance on Business Registration, dated 1 December 2015 - http://vepg.vn/wp-
content/uploads/2020/07/20_2015_TT-BKHDT_EN.pdf

25. Ministry of Public Security (MPS) Circular 66/2014/TT-BCA on the

Implementation of Decree 79/2014/ND-CP, dated 16 December 2014 – http://vepg.
vn/wp-content/uploads/2020/07/66_2014_TT-BCA_EN.pdf

Templates and Tools

26. Standard EVN Power Purchase Agreement, provided in the Annex of MOIT
Circular 18/2020 (replacing MOIT Circ. 16/2017) - http://vepg.vn/wp-content/
uploads/2020/08/Circular_18_TT-BCT_EN_final.pdf

27. Template Private Power Purchase Agreement with Rooftop Lease agreement
(Private PPA contract) - http://vepg.vn/rts-investment-guidelines/

28. Template Solar Lease and Maintenance Agreement (Solar Lease contract) –
http://vepg.vn/rts-investment-guidelines/

29. Template Rooftop Lease Agreement for 100% Sale to EVN (Roof Lease contract)
– http://vepg.vn/rts-investment-guidelines/

30. Template Solar Operation and Maintenance Agreement (O&M contract) - http://
vepg.vn/rts-investment-guidelines/

Other Useful References

31. IRENA 2016: End of Life Management of Photovoltaic Panels - https://www.irena.

org/publications/2016/Jun/End-of-life-management-Solar-Photovoltaic-Panels

56 | Investing in Rooftop Solar Systems in Viet Nam

 4 | Key References

Contributors

These Investment Guidelines were developed as a part of the “PV Rooftop Pilot Project”
- a development partnership between the Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH, Syntegra Solar International and Cat Tuong Corporation
under develoPPP.de Programme, commissioned by the German Federal Ministry for
Economic Cooperation and Development (BMZ).

The develoPPP.de programme in Viet Nam aims at fostering the involvement of the
private sector in areas where business opportunities and development policy initiatives
overlap. To this end, BMZ offers financial and technical support for companies that invest
in developing and emerging-market countries. Concretely, Cat Tuong and Syntegra - with
technical assistance from GIZ - will install a rooftop solar system at Cat Tuong’s factory in the
Mekong Delta’s Long An province. The solar system has a capacity of 850kWp generated by
approximately 2,560 PV modules covering 4,400m2 of roof space. It is expected to generate
1,230MWh of solar electricity every year, covering around 50% of the factory’s annual
average electricity demand. Excess solar power will be exported to the national electricity
grid. On an annual basis, the PV system is expected to save the Cat Tuong factory’s energy
costs by about USD102,000 and reduce CO2 emissions by 1,092 tons/year. The project
shall serve as a blueprint to demonstrate the technology’s benefits for industrial power
consumers, public utilities, and Viet Nam’s energy sector.

develoPPP.de is part of GIZ’s service portfolio with which it offers professional support for
companies investing in developing and emerging countries and develops strategies for
sustainable business practices. These include developing and piloting business ideas (lab
of tomorrow), embedding and scaling up projects in over 2,000 existing GIZ programmes,
and implementing projects that are directly commissioned (International Services).

GIZ is a German federal enterprise operating in international cooperation for sustainable

development and international education work for over 50 years. GIZ advises the German
Government, European Union and United Nations institutions, and businesses and
governments of other countries. Together with its partners, GIZ works to develop effective
solutions that offer people better prospects and sustainably improve their living conditions.
GIZ works in a wide variety of areas, including economic development and employment,
energy and the environment, and peace and security.

Syntegra Solar is a specialized consulting and project development firm with a focus on
renewable energies, particularly in Photovoltaic (PV) industries. It connects technology,
business and financial aspects along the entire value chain, from raw materials to individual
users of renewable energies. In this respect, Photovoltaic power plants have become the
main field of operation of Syntegra Solar, which currently employs a staff of 17 in different
regions around the world creating an annual turnover of more than CHF 3 million. Syntegra
Solar focuses especially on medium-sized PV rooftop power systems as one of the most
sensible and economic PV applications, where clean power is produced and consumed
directly on site.

Technical and Administrative Guidelines for Commercial and Industrial Projects | 57

4 | Key References

Cat Tuong Corp is a leading Vietnamese company in manufacturing and distributing

insulation materials. With offices and factories in Northern and Southern Viet Nam, Cat
Tuong provides a wide range of isolation products for residential housing, industrial building,
complementing its products with an excellent distribution system as well as architectural
consultancy. Founded in 2002, Cat Tuong Corp has been progressively achieving a steady
and uninterrupted growth, including a production capacity of 50 million m2 per year and a
distribution system of 1,500 stores in Viet Nam. By following international standards Cat
Tuong has been exporting its goods to 12 countries around the world, most of them located
in Europe and America. Building on its experience in the field of insulation, Cat Tuong is
planning to invest into Solar energy as a second business pillar.

Imprint
Publisher
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
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Authors
Dr. Nguyen Anh Tuan (Institute of Energy)
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Ilka Neyla Buss (IB Consulting)
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Christian Schaefer (Asia Counsel Vietnam Law Company Limited)
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Editors
Rainer Brohm (GIZ)
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Amber Sharick (GIZ)
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Photo Credits
Photo credits: © GIZ Viet Nam

Design and Layout

Lotus Design Studio Hanoi
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Funded by
BMZ- Federal Ministry for Economic Cooperation and Development
(Germany) through the develoPPP Programme

58 | Investing in Rooftop Solar Systems in Viet Nam

Published by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

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