After a long wait, the Government has officially issued Decree No. 135/2024/ND-CP dated 22 October 2024, providing mechanisms and policies to encourage the development of on-site self-consumption rooftop solar power ("Decree 135"). The Decree comes into effect on 22 October 2024 with the following notable highlights as follows:

1. Scope of Decree 135: The Decree applies to on-site self-consumption rooftop solar (RST) power systems installed on the roofs of various constructions including individual residences, offices, industrial zones, clusters, export processing zones, high-tech parks, economic zones, production facilities, and business establishment, all of which must be constructed in accordance with the applicable laws and regulations. Transactions between corporate entities or individuals with rooftop power systems and large electricity consumers must comply with Decree No. 80/2024/ND-CP on direct power purchase agreements.

2. General Conditions for On-Site Self-Consumption RST Power Systems (applicable to both grid-connected or non-grid-connected systems):

The construction works installed with the RST power systems shall adhere to regulations concerning investment, construction, land use, environmental protection, fire prevention, and firefighting. Relevant permits shall be submitted to the Department of Industry and Trade (DOIT) and competent authorities for verification and approval.

In addition, the use of second-hand solar panels and DC converters is strictly prohibited.

3. Non-grid-connected RST power systems: The developer is not required to register but must notify the DOIT and EVN and local construction and fire prevention and firefighting competent authorities where the RST power systems are located about the installed capacities and location of the RST power system. It remains unclear if the approvals from DOIT and EVN are necessary for non-grid-connected RST power systems.

4. Grid-connected RST power systems: Decree No. 135 outlines administrative procedures for grid-connected RST power systems based on capacity. In all cases, the total installed capacities must align with the existing loads based on the consumption over the past 12 months.

(a) RST power systems with a capacity of less than 100kW: Developers must notify the DOIT and local construction and fire prevention and firefighting competent authorities, similar to requirements for non-grid-connected systems. Developers can choose whether surplus electricity is fed into the national grid. A zero-export device must be installed if surplus electricity is not fed into the national grid.

(b) RST power systems with a capacity from 100 kW to under 1,000 kW: Developers must further notify EVN and may sell the surplus electricity if the capacity has not exceeded the total capacity allocated to local under the National Power Development Plan and its detailed plan.

(c) RST power systems with a capacity of 1,000 kW or more: Developer must register with the DOIT. The electricity operating license is required if the developer sells the surplus electricity to the national grid. When the total capacity exceeds the capacity allocated to such province/city under the National Power Development Plan and its detailed plan, the developer must additionally follow the procedure for adding power planning. A zero-export device must be installed if surplus electricity is not fed into the national grid.

Surplus electricity sold to the national grid must not exceed 20% of the installed capacity. The surplus sale price will be based on the previous year’s average market electricity price as announced by the grid and market operator.

5. Exemption from Power License: On-site self-consumption RST power systems are exempt from electricity operating license if they (i) are not connected to the national grid, (ii) are equipped with zero-export devices, or (iii) are installed by households or individual residences with a capacity below 100 kW.

6. Requirements for Selling Electricity: To sell electricity to EVN, developers must submit a sales application per Decree 135. The power purchase agreement will follow the Decree's template, with a five-year term from the date the RST power system is used. 

The issuance of Decree 135 marks a significant Government effort to "unfreeze" and stimulate investment in renewable energy after a long absence of specific regulations on on-site self-consumption RST power systems, despite the issuance of Power Plan VIII over a year ago. The Decree has also incorporated feedback from experts and investors to address issues in previous draft decrees, maximizing the potential of solar power for residential and industrial use.

Disclaimer: This publication is for general update. This should not be construed as professional advice for any specific case, entity, or individual. If you require further information or professional assistance concerning your specific circumstances, please feel free to contact us.