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Vietnamese Prime Minister Pham Minh Chinh calls for swift resolution of the feed-in tariff dispute. (Photo: Baochinhphu)
The Vietnamese government is facing mounting challenges in its renewable energy sector. A year after announcing the Direct Power Purchase Agreement (DPPA) framework, no implementable projects have materialized.
Meanwhile, the previously ambitious feed-in tariff (FiT) mechanism for solar and wind has become mired in legal controversy, prompting Prime Minister Pham Minh Chinh to order urgent solutions on July 23 to avoid widespread fallout that could stall the sector’s growth.
Developers push back against FiT subsidy clawbacks
Over 40 domestic and foreign investors have issued multiple joint statements urging the government to revoke a directive demanding the return of FiT subsidies. The policy affects 173 projects with a total investment of USD 13 billion and has raised fears of bankruptcy across the sector.
The FiT mechanism led to a surge in solar and wind development between 2017 and 2021. However, outdated grid infrastructure couldn’t keep pace with the expansion of renewables, and the generous subsidies left national utility EVN with mounting losses. Critics began calling for a comprehensive review of the FiT system.
Following an investigation, authorities found that some projects had not completed technical inspections before commissioning, yet still received FiT payments. In response, the Ministry of Industry and Trade (MOIT) instructed EVN to review the affected projects and recover payments deemed ineligible. This move has sparked backlash from developers, who argue that retroactive enforcement will slash project revenues and could trigger bankruptcies.
