Vietnam Solar Energy Market Portraying Sturdy Growth—Projected to Grow at a CAGR of 7.3% by 2028
Published | 10 January 2022
Vietnam’s solar energy market is growing at an accelerated pace majorly supported by the rising government initiatives and programs such as National Power Development Master Plan (PDP VII) for 2011- 2020, with a vision for 2030.
A study, recently conducted by the strategic consulting and market research firm BlueWeave Consulting, revealed that the Vietnam solar energy market is growing dynamically and expected to grow at a CAGR of 7.3% during the forecast period (2022-2028). Solar energy is one of the cleanest sources of renewable energy available today. Considering the abundance of solar energy and increasing electricity demand in the country, Vietnam promotes solar energy as an alternative source of power generation, which is contributing to the growth of the Vietnam solar energy market. For instance, Sharp Energy Solutions Corporation (SESJ) constructed a giant solar power project in Ninh Thuan province in June 2020. To meet the ongoing electricity demand in Vietnam, the new plant generates 76,373 megawatt hours (MWh) each year.
Increasing Investment in Solar Energy Projects Driving Vietnam Solar Energy Market
The demand for renewable energy in Vietnam is being satisfied by investing in large-scale solar power facilities. Over the next decade, energy demand is forecast to rise by more than 9% as the country recovers from the pandemic-induced depression. A draft report by the Ministry of Industry and Trade (MoIT) estimates Vietnam will need around US$128.3 billion in investment to grow its energy industry between 2021 and 2030. By the end of 2019, Vietnam had surpassed Malaysia and Thailand in terms of installed solar panel capacity in Southeast Asia. This was only possible due to the increasing investment in solar energy projects in Vietnam, which has fueled the growth of the market, as the country now has 5 gigatonnes (GW) of solar installations, far exceeding the target of 1 GW by 2020.
Favorable Government Initiatives Powering the Growth of Vietnam Solar Energy Market
One of the critical and essential topics for countries across the globe is regarding reducing carbon footprints and climate change. The reduction of carbon footprints and climate change is a critical and essential topic for countries across the globe. In an effort to combat climate change and reduce the region's carbon footprint, the Vietnamese government has launched its National Power Development Plan (PDP) VII. The PDP VIII, on the other hand, focuses on renewable energy development and investor attraction, incorporating a long-term vision of 2045. The proposal encourages renewable energy production while discouraging hydroelectricity. As of 2020, renewables produced 13% of power, but the goal is to increase that to 30% by 2030. Though this is an ambitious goal, it represents the government's push toward renewable energy. By 2030, Vietnam plans to generate 29% of its electricity from solar, wind, and other renewable sources, driving the market for solar energy.
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Photovoltaic Systems Segment Holds the Largest Share in the Market
Based on technology, the Vietnam solar energy market is segmented into solar photovoltaic systems and concentrated solar power systems. The solar photovoltaic (PV) systems segment holds the largest share in the Vietnam solar energy market generating a significant amount of revenue. Solar PV capacity in the country climbed from 86 MW in 2018 to 4,750 MW in 2019. Consequently, Vietnam has surpassed Thailand in terms of installed solar capacity, generating 16,500MW by 2020. A growing PV capacity in Vietnam has therefore contributed to the growth of the photovoltaic segment in the solar energy market.
Impact of COVID-19 on Vietnam Solar Energy Market
The COVID-19 has had a negative impact on Vietnam's solar energy market. The ongoing energy crisis in China has also impacted the energy sector in Vietnam. Various projects have been held up by delays in the supply chain and shipping raw materials that were supposed to come from China. Several economists say that Vietnam is affected by the current energy crisis because rising gasoline prices result in higher input costs in power plants that rely on imported fuel. To counter the energy crisis, Vietnam is planning to increase energy supply from renewable sources. However, a significant challenge remains in ensuring low power costs and an adequate supply of high-quality electricity for socio-economic development.
Vietnam Solar Energy Market- Competitive Landscape
Some of the key players in the Vietnam Solar Energy market are Sharp Energy Solutions Corporation, Tata Power Solar Systems Ltd., Giang Son, Berkeley Energy Commercial & Industrial Solutions, Trina Solar, Yingli Solar, BCG Energy, Wuxi Suntech Power Co. Ltd., Vivaan Solar, GE Renewable, Siemens Energy, German ASEAN Power, B.Grimm Power Public Co. Ltd., Schletter Group, JA Solar, Sunseap International, Nippon Sheet Glass, Ecoprogetti, Tata Power, Shapoorji Pallonji Infrastructure Capital, Gulf Energy Development, InfraCo Asia Development, and ACWA Power, and other prominent players. Increasing government initiatives to install solar energy plants across the region and achieve net-zero emissions by 2030 are driving stiff competition in the market. Moreover, the Vietnamese government is collaborating with foreign companies to commission and install new projects, increasing competition in the market.
In December 2021, BCG Energy and Singapore Utilities partnered in Vietnam to develop a pipeline of wind and solar projects of up to 1.5 GW. Phase one of the collaboration is estimated to cost $40.95 million (US$30 million) and involves the development of 550MW nearshore and onshore wind assets in Ca Mau, Tra Vinh, and Soc Trang.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Vietnam solar energy market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in the Vietnam solar energy market, along with industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.
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