A high potential solar market in Vietnam

Vietnam ’s geographical location makes it very rich in renewable resources, especially solar energy resources. Vietnam is in a region with relatively large solar radiation, with Ho Chi Minh City having the longest solar radiation.

In 2017, the government of Vietnam decided to offer solar energy developers an incentive to build more solar power plants, they have introduced a new direct power purchase agreement (DPPA), where renewable energy producers can sell and deliver electricity directly to corporate customers. The government is also looking to draft a new power development plan by June 2020.

Source: Fitch Solutions Macro Research

Vietnam will increase electricity demand and consumption in the next ten years, which will stimulate demand for the rapid development of new electricity capacity. This mainly stems from the expanding industry and manufacturing. Positive demographic data and rapid urbanization will also further promote Vietnam's electricity consumption growth rate.

As a result, Vietnam has seen growing investor interest and a strengthening pipeline of solar energy projects. Other significant developments in the sector this year included the operation and grid-connection of several firsts across various provinces. As development continues, investors are likely to find bright spots for investment in solar power across Vietnam.