Residential solar power market booming

From the end of March, the retail electricity price started to rise by 8.36% to VND1,864 from  VND1,720 per kilowatt hour (kWh).

In addition, on March 11, the Ministry of Industry and Trade issued Decision 05/2019, setting the price for electricity generated from rooftop solar power projects, with which EVN had signed power purchase contracts prior to June 30, at VND2,086, or 9.35 U.S. cents, per kWh.

The term for the electricity purchase contracts with EVN is set to last 20 years from the start of commercial operations of the projects.

As a result, more and more enterprises and households are getting involved in the sector.

Mai Van Trung, business development director at Bach Khoa Investment & Development of Solar Energy Corporation (SolarBK), told the Saigon Times that the demand for rooftop solar systems has surged. The company had earlier installed only three to four solar power systems per month, but now, the number has surged tenfold.

A representative of Vu Hong Minh Solar Company in HCMC’s Tan Phu District stated that the company has installed solar power systems for nearly 100 individuals and enterprises across the country. The high demand for solar power systems was attributed to the electricity price hike.

Further, the Ministry of Industry and Trade has proposed the highest price, at VND2,486 per kWh, for power from rooftop solar power projects, compared with other types of solar power projects, such as ground-mounted ones. The price of VND2,134 (excluding value-added tax) is currently being applied to all types of solar power projects.

Nguyen Thi Thu Huong, a resident of Can Tho City, noted that her household installed a three-kilowatt solar power system several months ago at a cost of VND66 million. Her family’s electricity bills have since plunged from VND1.2 million to VND150,000 per month. Huong said it may take more than five years to recover the initial capital, while the system can remain operational for 25-30 years.

Meanwhile, Nguyen Vu Thanh Loan, director of Bao Tran Production Trading Co., Ltd, in Hoc Mon District, stated that her company has also installed a solar power system with a capacity of 10 kilowatts, which required some VND220 million in capital.

The company plans to raise the capacity of the solar power system to 20-30 kilowatts to reduce its electricity bills by some VND3.6 million per month. It expects to recover the capital in five to six years.

According to Le Minh, deputy general director for strategies at Riny, which specializes in installing solar power systems, the solar power market is competitive with the participation of many new enterprises, bringing more choices for customers.

The capacity of the solar power system can range from 1.5 to 60 kilowatts. Riny charges VND35 million to install a 1.5-kilowatt solar power system and VND995 million for a 60-kilowatt system, Minh added.

Nguyen Ngoc Quynh, business director at SolarGates Trading JSC, a subsidiary of SolarBK, remarked that the company had set a price of VND20 million per kilowatt peak for rooftop power installations. The cost may drop by VND2 million in the coming period.

According to statistics from HCMC Power Corporation (EVN HCMC), as of last month, nearly 1,400 households in HCMC whose rooftop solar power systems have a total capacity of 16.68 megawatts have signed contracts to sell electricity to the corporation.

EVN HCMC General Director Pham Quoc Bao acknowledged that HCMC will install solar power systems on rooftops with a total capacity of 50-80 megawatts this year.

He cited statistics from the World Bank, noting that the city has the potential to raise the capacity to 150-220, even thousands, of megawatts.