Solar panels in An Phu Trung commune, Ben Tre province (Photo: VNA)

HCM City (VNA) - The potential for solar energy in Vietnam is huge but needs appropriate policies to encourage investment, a recent conference heard in HCM City.

The country has enormous solar potential, especially in its central and southern parts, Sonia Lioret, head of the renewable energy component at the German Agency for International Cooperation, said at a Vietnam– Germany conference on “Photovoltaics in Vietnam: Free-field and Net-Metering before Breakthrough” on September 12.

It has average solar irradiation of 4-5 kWh/squ.m/day, which is comparable to Thailand and the Philippines, which are more developed solar markets in the region, as well as to mature international markets like Spain and Italy.

The Vietnamese Government has recognised this potential and aims to significantly increase renewable energy production including solar power.

Under its newly revised Power Development Plan for until 2030, which includes ambitious development targets for renewables in general and solar energy in particular, the capacity of solar photovoltaics (PV) shall increase from around 7 megawatts (MW) now to 850MW by 2020 and 12,000 MW by 2030.

The solar PV market in Vietnam is at an early stage, Lioret said, adding that 6-7 MWp has been installed in the country.

Approximately 80 percent of that capacity is deployed off-grid, mainly through small scale applications and only 20 percent is connected to the grid, with a few medium- and large-sized systems of more than 50 kWp used for piloting and demonstration.

Since there is no suitable policy framework for solar PV investments in Vietnam, the main business model now is self-consumption, delegates said.

Pham Trong Thuc, Director of the General Department of Energy’s renewable energy department, said, “Development of renewable energy is one of the key solutions to meet energy demand, ensure energy security and increase rural electrification, especially in remote areas and islands.“

The Government would soon strive to create suitable mechanisms and policies to encourage the sector’s development, he said.

Besides, “financial and technical support from international organisations and developed countries to promote renewable energy development in Vietnam is really needed,” he said.

Rainer Brohm, a renewable energy consultant, said the German Government has funds to help and support investment in case a Vietnamese company partners with a German company.

He also presented a recent assessment of investment opportunities in Vietnam with six detailed solar PV rooftop case studies.

The study shows there are attractive investment opportunities, but also shows that the low electricity tariffs in Vietnam are a big challenge and an assumption of a future increase in tariffs is a critical factor in investment calculations.

Organised by the Delegate of German Industry and Commerce in Vietnam in cooperation with GIZ GmbH, the conference attracted 150 Vietnamese firms and six German companies in the solar power sector, including IBC Solar AG, M+W Group GmbH, Droege Energy GmbH, CARERA Solar/Hydro UG, ILF Consulting Engineers GmbH and Syntegra Solar International AG.

According to the German companies, Vietnam’s emerging solar market offers them attractive opportunities.

Patrick Gavin Matweew, Director of M+W Group’s Energy Business Development in Asia-Pacific region, said: “Vietnam is a perfect market to look into solar, we thought that is the market we want to invest in 2016.”

The Vietnamese Government should provide clarity in terms of technical regulations to connect to the grid and the feed-in tariff and create policies that create a stable and reliable environment -- which would attract international investors -- for the solar market to kick-start, he said.

Bjorn Koslowski, deputy chief representative of the Delegate of German Industry and Commerce in Vietnam, said Germany first invested in this kind of energy 15 years ago.

With German technologies and equipment and know-how, German experts are willing to support Vietnamese companies in this sector in planning and implementing all PV and renewable projects for sustainable development, he added.-VNA