Vietnam’s solar power industry has experienced rapid growth in recent years, driven by favourable government policies and increasing demand for renewable energy.
With abundant solar potential due to its geographical location, the country has become a significant player in the Southeast Asian renewable energy market.
The introduction of attractive feed-in tariffs in 2017 spurred a surge in solar installations, leading to a dramatic increase in capacity and investment.
As a result, Vietnam now boasts one of the highest installed solar capacities in the region, contributing to its goal of transitioning to a more sustainable energy mix.
Despite this progress, the industry faces several challenges, including grid congestion, regulatory uncertainties, and difficulties in integrating renewable energy into the national grid.
The rapid expansion of solar projects has outpaced infrastructure development, leading to bottlenecks and curtailment of power generation.
Additionally, changes in policy frameworks, such as the adjustment of feed-in tariffs and delays in the implementation of a competitive bidding mechanism, have created uncertainties for investors and developers, affecting long-term planning and financing.
Looking forward, the future of Vietnam’s solar power industry will depend on the government’s ability to address these challenges and create a more stable regulatory environment.
Investment in grid infrastructure, the introduction of more transparent policies, and the development of energy storage solutions will be crucial for sustaining growth.
As global and domestic demand for clean energy continues to rise, Vietnam has the potential to become a leader in renewable energy production, provided it navigates these challenges effectively.
Solar power policies in Vietnam
Vietnam’s solar power sector is governed by a number of key regulations and policies aimed at promoting the development of renewable energy while managing the challenges associated with rapid growth.
Feed-in Tariff (FiT) Program
The FiT program has been a major driver of solar power development in Vietnam, offering a tariff of 9.35 cents per kilowatt-hour (kWh) for projects completed by June 2019.
This program led to a surge in solar capacity, reaching 4.46 gigawatts of new installations.
This rapid growth resulted in an overloading of the national grid, prompting the government to revise the FiT rate to 7.09 cents per kWh for projects that commenced operations between July 2019 and the end of 2020.
This revised tariff aimed to balance investment incentives with market sustainability.
The FiT rates apply for 20 years and do not account for value-added tax or fluctuations in currency exchange rates.
However, there were exceptions, such as for projects in Ninh Thuan Province, which could still benefit from the higher 9.35 cents rate due to a separate development plan for projects under 2,000 MW capacity.
That said, the government has recently been trying to renege on paying the feed-in tariffs citing a failure to obtain required project approvals, construction permits and regulatory clearances.
Authorities argue that some projects were connected to the grid before completing all administrative procedures, leading regulators to reassess the eligibility of those plants for preferential tariff rates.
As of writing, this issue is still not settled.
As recently as March 13, 2026, it was reported that some investors were considering suing over the change of policy.
Power Development Plan 8
The Power Development Plan 8 (PDP8) is a cornerstone of Vietnam’s electricity industry.
It was first published in May 2023 and then revised in April 2025. The revised PDP8 lifted solar power targets ambitiously.
Specifically, the 2023 plan targeted 168–189 GW by 2050, but the revised plan raised this to 293–296 GW, with rooftop solar included under self-consumption provisions.
Notably, the 2025 plan mandates that concentrated solar must include storage (minimum 10 percent of capacity, 2-hour duration), a requirement absent in the 2023 version.
See also: Vietnam’s Revised Power Development Plan 8: What’s Changed?
Solar panel trade in Vietnam
Vietnam’s solar panel trade is regulated under Decree 26/2023/ND-CP, which outlines the Schedule of Export Tariffs and Preferential Import Tariffs.
This decree, effective from July 15, 2023, sets specific import duties on goods, including solar panels and related components.
It aims to balance domestic production with international trade, offering tax incentives for the development and assembly of key industries, including renewable energy.
The regulations support local manufacturers while maintaining a competitive import market for solar technology
US circumventing duties on solar panels from Vietnam
Late in 2023, some solar products exported from Vietnam, Thailand, Cambodia, and Malaysia were found to be circumventing duties applied to some Chinese solar products by the US Department of Commerce.
Of note, however, a presidential proclamation was issued in 2022 exempting solar imports from the four Southeast Asian countries from paying additional duties for two years.
This amnesty has now ended; however, new antidumping cases have arisen with respect to addressing solar imports from Vietnam.
This speaks to the challenges Vietnam has faced related to anti-dumping tariffs on solar panels, particularly concerning accusations of illegal transshipments.
Some foreign companies have attempted to label Chinese-made solar products as Vietnamese to bypass higher U.S. tariffs.
In response, Vietnamese customs authorities have made some attempts to crack down on these practices.
For instance, several companies were investigated and penalised for mislabeling products like solar batteries and other goods to take advantage of Vietnam’s trade agreements with the U.S. and the EU.
See also: Trans shipping: To What Extent is Vietnam China’s backdoor to the U.S.?
FAQ: Solar power in Vietnam
These are some of the most common questions about solar power in Vietnam.
How big is Vietnam’s solar power industry?
Vietnam’s solar power industry has grown rapidly since 2017, driven by generous feed-in tariffs and strong government support.
The country now has one of the highest installed solar capacities in Southeast Asia, contributing significantly to its renewable energy goals.
What challenges is Vietnam’s solar power sector facing?
The industry faces multiple challenges, including grid congestion, delays in implementing competitive bidding, and policy uncertainty.
Rapid development has outpaced grid infrastructure, leading to curtailment of power output and uncertainty for investors.
What is the current status of Vietnam’s feed-in tariff (FiT) scheme?
The FiT scheme, which initially offered high returns to developers, has been scaled back and replaced with plans for competitive bidding.
New large-scale solar projects have been temporarily suspended, and future incentives will likely depend on transparent auctions aligned with grid capacity.
How does the revised Power Development Plan 8 affect solar energy?
The revised PDP8 (2025) significantly raises Vietnam’s solar capacity targets to nearly 296 GW by 2050.
It mandates energy storage requirements for concentrated solar and supports self-consumption rooftop solar, signalling a long-term commitment to renewable energy integration.
What risks do foreign solar investors face in Vietnam?
Foreign investors face risks including regulatory instability, grid limitations, and trade-related issues like anti-dumping investigations.
Recent US scrutiny over transshipped solar panels highlights the importance of supply chain transparency for firms operating in or exporting from Vietnam.
What’s next?
Vietnam’s solar power industry has experienced rapid growth in recent years, driven by favourable government policies and increasing demand for renewable energy.
With abundant solar potential due to its geographical location, the country has become a significant player in the Southeast Asian renewable energy market.
However, regulatory uncertainty has become a key bug-bear for foreign firms, and this has slowed the industry’s development.
That said, these regulatory challenges could soon be overcome as the government works on a new strategy for solar power development in Vietnam.
With this in mind, foreign firms looking to track the development of Vietnam’s solar power industry should make sure to subscribe to the-shiv.
First published September 28, 2024. Last updated March 13, 2026.