Decree 135: Paving the Way for Rooftop Solar Power in Vietnam

On 22 October 2024, the Government of Vietnam issued Decree No. 135/2024/ND-CP stipulating policies encouraging development of self-produced and self-consumed rooftop solar power (“Decree 135”), which would immediately take effect from the date of issuance.

Decree 135 ends nearly four years of the lack of a specific regulatory framework on this type of rooftop solar power (“RTS”), following the expiration in 2021 of the Prime Minister’s Decision No. 13/2020/QD-TTg on policies encouraging the development of solar power.

The key points of Decree 135 will be presented in the following article.

Download PDF file: Legal Update_Decree 135: Paving the Way for Rooftop Solar Power in Vietnam

Scope of application

Decree 135 only regulates Rooftop Solar Power for purpose of self-production and self-consumption. Regarding Rooftop Solar Power for commercial purpose, this type shall be regulated by the Government’s Decree No. 80/2024/ND-CP dated 03 July 2024 on Direct Power Purchase Agreements between Renewable Energy Generation Corporations and Large Power Consumers, which was also updated by CNC.

Differences in the scope of application between the two Decrees on Rooftop Solar Power

Accordingly, “RTS” according to Decree 135 is solar power installed on rooftops of construction works including houses, offices, industrial parks, industrial clusters, export processing zones, high-tech zones, economic zones, production facilities, and business establishments invested and built by the law.[1] Before installation of the self-produced and self-consumed Rooftop Solar Power system, construction works shall comply with regulations of applicable laws on electrical safety, investment, construction, environment and fire prevention.[2]

Regarding the subject of application, Decree 135 applies to organizations and individuals managing and participating in the development of self-produced and self-consumed Rooftop Solar Power in Vietnam (hereinafter collectively referred to as “Users”) and other relevant organizations and individuals. However, it should be noted that no provision in Decree 135 requires the Users and owners of Rooftop Solar Power to be the same entities. In other words, the Users may rent, borrow or cooperate through other forms with the owner and operator of the Rooftop Solar Power system.

Regarding the type of RTS, there are two types including:

(i) Not connected to the national electricity grid (“Off-Grid RTS”);

(ii) Connected to the national electricity grid (“Grid-Connected RTS”) (with two options to sell or not sell surplus electricity to the national grid).

Types of Rooftop Solar Power according to Decree 135

Procedures to be carried out by Users

The RTS Users shall, as the case may be, conduct the following procedures:

Electricity planning;
Notification to or registration with the Department of Industry and Trade (“DoIT”);
Notification to local authorities of construction, fire prevention and electricity;
Acceptance of investment in construction and installation;
Electricity operating license;
Conducting procedures for sale of surplus electricity.

Procedures to be carried out by each type of the Rooftop Solar Power Users

Electricity planning

The Users installing RTS with an installed capacity of 1.000kW and over and selling surplus electricity back to the national electricity grid shall follow procedures for electricity planning unless the installed capacity complies with local generation planning and plan for execution thereof.[3]

For other cases, the Users shall not conduct such procedures.

Notification to or registration with the DoIT

The Users required to notify the DoIT are those of Off-Grid RTS or Grid-Connected RTS with an installed capacity of less than 1000 kW. For Grid-Connected RTS with an installed capacity from 100 kW to less than 1000 kW, the notification to the DoIT shall be enclosed with the design dossier.[4]

Apart from the above cases, the Users shall register with the DoIT to be granted the certificate of registration for RTS development. The dossier of registration with the DoIT shall include an application form according to Form No. 01 enclosed with Decree 135 and design drawings, along with copies of other relevant documents (if any).[5]

Procedures for issuing certificate of registration for RTS development are carried out according to the following flowchart:[6]

Procedures for issuing certificate of registration for Rooftop Solar Power development

Notification to local authorities of construction, fire prevention and electricity

The Users required to notify the DoIT shall also conduct the notification procedures with local authorities of construction, fire prevention, and electricity.[7]

Acceptance of investment in construction and installation

Before putting into operation, the Users shall carry out the acceptance of investment in construction and installation of RTS systems according to the guidelines of local authorities on construction, environment, fire prevention and electricity.

For the Grid-Connected RTS, the Users shall also coordinate with the local electricity utility to conduct the acceptance of metering and remote data collection systems (except for the case of the RTS with the capacity of less than 100 kW and not selling surplus electricity).

Additionally, for the Grid-Connected RTS without selling surplus electricity, the employer of the RTS system shall coordinate with the local electricity utility to inspect and conduct the acceptance of installation of reverse current prevention devices for the national electricity grid.[8]

Electricity operating license

Electricity operating licenses are exempted in the following cases:[9]

Not connected to the national electricity grid;
Installing reverse current prevention devices for the national electricity grid;
Household and individual residences self-produce and self-consume with a capacity of under 100kW.

For other cases, the Users shall conduct the procedure to obtain an electricity operating license before generating electricity in accordance with current regulations.[10]

Sale of surplus electricity

The sale of surplus electricity is the noteworthy policy for the Grid-Connected RTS. Accordingly, to conduct such transactions, Decree 135 sets certain conditions as follows:[11]

Seller: organization, individual owning RTS or organization, individual receiving rights and obligations thereof;
Buyer: EVN (or member units authorized by EVN);
Type of RTS: Grid-Connected RTS (i) having capacity complying with local planning and plan for execution thereof, or (ii) belonging to households and individual residences with the capacity of under 100kW;
Surplus electricity allowed to be sold: Up to 20% of the actual installed capacity;
Sale price: Equal to the average market electricity price in the previous year announced by the power system and electricity market operator.

It is worth-noting that Decree 135 does not allow the Users of the rooftop solar panels installed on office buildings or properties classified as public assets to sell surplus electricity.

Additionally, the Grid-Connected RTS Users selecting to sell surplus electricity shall ensure that the installed capacity complies with local planning and a plan for execution thereof.[12]

Conducting procedures for sale of surplus electricity

To be entitled to sell surplus electricity, the Grid-Connected RTS User shall register to sell surplus electricity with EVN.[13]

First of all, the User shall submit a dossier including the following documents:

An application form for selling surplus electricity;
Technical documents on solar panels, devices converting direct current to alternating current, power lines;
Certificate of Origin, Certificate of Quality of the device (copies);
A registration certificate/ a written confirmation provided by the DoIT confirming that the installed capacity complies with local planning and a plan for execution thereof;
Project completion documentation;
Written approvals for acceptance (if any) granted by relevant

Within 05 working days from the application date, the User and EVN shall conduct the technical inspection, install the electricity meter to conclude meter readings. Subsequently, the parties shall conclude the contract for the sale of surplus electricity (according to Form No. 05 enclosed with Decree 135) and connect the electrical wires for operation.

The process of conducting procedures for sale of surplus electricity

Other Investment Incentives

Decree 135 also provides several investment incentives on: taxes, administrative procedures, land, business licenses.

Other investment incentives

Transitional Provisions

For Rooftop Solar Power systems installed and commercially operated before 01 January 2021, the Users are not allowed to register for additional RTS installation at the same location.

For Rooftop Solar Power systems installed and operated since 01 January 2021, the Users shall submit relevant information to the DoIT to be granted the certificate of registration for RTS development. Additionally, the Users selecting to sell surplus electricity shall conduct the transaction under Decree 135.

Written by

Senior Associate Tran Pham Hoang Tung

Phone: (84) 901 334 192

Email: tung.tran@cnccounsel.com

Legal Assistant – Pham Nguyen Tan Trung

Phone: (84) 028 6276 9900

Email: trung.pham@cnccounsel.com

[1] Article 1, Decree 135.

[2] Article 4.4, Decree 135.

[3] Article 8.2, Decree 135.

[4] Article 6, Article 7.4 and Article 7.5, Decree 135.

[5] Article 10.2, Decree 135.

[6] Article 9.2 and Article 12, Decree 135.

[7] Article 6, Article 7.5 and Article 7.6, Decree 135.

[8] Article 17, Decree 135.

[9] Article 8.1, Decree 135

[10] Article 17.2(b), Decree 135

[11] Article 3 and Article 8.7, Decree 135.

[12] Article 7.6 and Article 8.2 of Decree 135.

[13] Article 18, Decree 135.