Vietnam Issues Decree on Renewable Energy Development and Incentives

The Vietnamese government has issued Decree No. 58/2025/ND-CP, outlining the implementation of certain provisions of the Electricity Law related to renewable and new energy development. The decree introduces regulatory priorities and incentive mechanisms to promote clean energy investments.

Under the decree, renewable energy projects equipped with electricity storage systems and connected to the national grid will be prioritized during peak electricity demand hours, in accordance with existing regulations. However, this does not apply to self-produced and self-consumed electricity.

The decree also emphasizes Vietnam’s commitment to advancing research and technological innovation in wind and solar power. The state will prioritize programs focusing on the research, development, and production of solar panels, wind turbines, and power conversion equipment, aligning with Article 8 of the Electricity Law and other legal provisions.

Incentive Mechanisms for New Energy Projects

New energy projects that generate electricity entirely from green hydrogen, green ammonia, or a combination of both and supply power to the national grid will be eligible for incentives, provided they are the first of their kind in each energy category. These incentives include:

• Maritime Area Use Fee Exemption & Reduction: Exemption from maritime area use fees during the capital construction phase for up to three years, followed by a 50% fee reduction for the next nine years.
• Land Use Fee Exemptions: Full exemption from land use and rental fees during the capital construction phase (up to three years), with further reductions applied according to investment and land regulations.
• Minimum Long-Term Electricity Purchase Guarantee: A commitment to purchase at least 70% of the contracted electricity output during the principal loan repayment period, capped at 12 years, unless otherwise agreed by the investor and electricity purchaser. However, this guarantee does not apply if projects fail to meet the minimum output due to technical issues, grid constraints, or load demand limitations.
• Future Policy Adaptation: After the specified incentive period, applicable policies will align with the prevailing legal framework at the time of contract expiration.

Rooftop Solar Contracts Under Review

In a related development, Thu Dau Mot Water JSC has submitted a document to the State Securities Commission (SSC) and the Ho Chi Minh Stock Exchange (HOSE) concerning rooftop solar power purchasing contracts. The company’s communication suggests ongoing regulatory and contractual considerations within the renewable energy sector.

With Decree No. 58/2025/ND-CP in place, Vietnam aims to bolster renewable energy development while providing financial and regulatory support to attract investments in green energy projects.