INVESTMENT IN SOLAR PV ROOFTOP – LICENSES, PROCEDURES?

Currently, the investment in solar power is an industry encouraged for development, especially after the Prime Minister has approved Decision No. 11/2017 / QĐ-TTg and Decision No. 13/2020 / QD-TTg (“Decision 13”) with mechanisms to encourage solar power development. In particular, the investment in solar PV rooftop is especially encouraged because it takes advantage of unused roof space, does not cost more land resources, by applying higher electricity tariff and simplifying related procedures and licenses.

1. Rooftop PV models

During recent phase, the investment in solar PV rooftop is usually developed in 2 following models:

  1. Roof owners invest in building, installing solar PV rooftop on their own roofs to produce electricity for use and sell unused electricity to EVN.
  2. A professional solar PV investor cooperates with or rents roofs to invest in, build and install solar PV rooftop, then sell electricity to roof owners and / or to EVN.

So, specifically, what licenses and procedures should the solar PV rooftop investment require?

2. Licenses for investment in solar PV rooftop

Pursuant to Article 3, Circular No. 36/2018 / TT-BCT issued by the Ministry of Industry and Trade on October 16, 2018, effective October 6, 2018, the following cases are exempt from operating licenses. Electricity, including:

“2. The generation of electricity with an installed capacity of not exceeding 01 MW (or 01 MWp if it is a solar power plant installed at a single location and having one point of connection) is to sell electricity to other organizations or individuals.”

However, according to Decision 13, there is a clearer definition of “rooftop solar PV system” in terms of capacity of 1 MW (maximum capacity of panels is 1.25 Mwp): Rooftop solar PV system refers solar system in which solar panels are installed on the roof of the construction with no more than 1 MW in power and directly or indirectly connected to power grid with up to 35kV of the buyers.

And accordingly, Circular 18/2020 / TT-BCT takes effect on August 31, 2020, in Clause 4 Article 5 – Development of rooftop solar power system: “Rooftop solar PV system shall be exempted from power operation permit”

As a result, the rooftop solar PV system will be exempt from the electricity operation license, which previously required a lot of conditions on facilities and specialized personnel in the process of applying for an electricity operation license. However, the exemption from the electricity activity license still has many conflicting point of views about the subject of application. Therefore, depending on each case, subject and business model, Law Plus will specifically advise you.

3. Business lines for investment in solar PV rooftop

According to the provisions of Vietnamese law on the registration of business lines, for businesses that invest in solar PV rooftop to sell electricity to EVN, or sell electricity to other organizations and individuals, those enterprises need to include the business line of generation of electricity (code 3511) and / or transmission and distribution of electricity (code 3512). In case the solar PV rooftop company fails to notify the change of the appropriate business lines, it may be subject to administrative penalties for delay in notifying the change of business registration information as follows:

  • A warning or a fine of between VND 500,000 and 1,000,000 for the act of notifying changes to the business registration content from 01 to 30 days later than schedule.
  • A fine of from 1,000,000 VND to 2,000,000 VND shall be imposed for notifying changes to the business registration information from 31 to 90 days later than schedule.
  • A fine of from VND 2,000,000 to VND 5,000,000 shall be imposed for notifying changes in business registration information 91 days or more later than schedule.

In addition, the enterprise must also take remedial measures: forced to notify the Provincial Business Registration Office of the contents as prescribed.

However, due to the limitation of business line in the WTO Commitments when Vietnam joins the WTO, Law Plus encourages foreign-invested enterprises who want to invest in solar PV Rooftop to sell the electricity, it is necessary to have professional consulting units on the solar power industry to know more detailed procedures to supplement the business lines, adjust the investment certificate to match the regulations and meet the investment timeline.

4. Conclusion

In addition to the above procedures and licenses, for businesses specializing in solar PV rooftop investment, Law Plus reckons that businesses need to build their a legal, reasonable and and having a risk management mechanism as the investment in solar PV is new and lasts for a long-term. Agreements related to investment cooperation, roof rental, power purchase agreement and other related contracts should be formulated and signed closely between related parties and in accordance with the law to minimize risks arising in the investment process of solar PV rooftop.

Law Plus will continue to update with relevant regulations on solar PV rooftop quality standards, construction permits and other detailed instructions from competent authorities in investment and solar PV rooftop business. Please contact us at hotline +84 2862 779 399 or email info@lawplus.vn for specific advice.

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