Market Trends of Vietnam Solar Energy Industry
Solar Photovoltaic (PV) Segment is Expected to Dominate the Market
- The solar PV segment will likely have the largest market share during the forecast period, owing to the declining costs of solar modules and the versatility of these systems for various applications, like electricity generation and water heating.
- According to the IRENA Renewable Energy Statistics 2023, the installed solar PV capacity in Vietnam was around 18,474 MW in 2022, up from 16,660 MW in 2021. The growth results from massive deployments of solar PV installations in Vietnam, particularly for utility projects. The Ministry of Industry and Trade (MOIT) has more plans to increase the solar PV installed capacity.
- In May 2023, the Vietnamese government launched a USD 135 billion energy strategy, with half of the country's residential rooftops to be outfitted with photovoltaic (PV) systems through a net-metering scheme. The government hopes to be a power exporter in eight years.
- Moreover, the country plans to commission its Phong Hoa Solar PV Park with a capacity of 50 MW located in Thua Thien-Hue province by the end of 2023. The project is being developed by STEAG Solar Energy Solutions and Thai Dat Construction.
- Due to these developments, the solar PV segment is expected to have the largest market share in Vietnam during the forecast period.
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Increasing Electricity Demand Driving the Market Demand
- The Vietnamese Ministry of Energy predicts that the country is expected to suffer power shortages as the development of new power plants lags behind the country's rapidly expanding energy consumption.
- With increasing industrialisation and economic modernisation, energy demand is expected to rise by more than 8% annually over the next seven years.
- In the first ten months of 2022, Vietnam's electricity production and demand totalled 226 billion Kilowatt-hours. During the last decade, energy demand increased gradually year after year. Moreover, Vietnam will need 96,500MW of electricity in the next two years and 129,500MW in the next seven years to meet the rising demand.
- To meet the upcoming electricity demand, Vietnam requires around USD 10 billion annually until 2030 to keep pace with the growing demand. With such high capital requirements, the government has allowed 100 per cent foreign ownership of Vietnamese companies in the energy sector.
- Thus, Vietnam is focusing on renewable energy sources to meet the future electricity demand, which is propelling the growth of Vietnam's solar energy market.
