Decree 58: Rooftop Solar, Offshore Wind, and New Energy Incentives Clarified

On 3 March 2025, the Government of Vietnam issued Decree 58/2025/ND-CP (Decree 58), providing detailed implementation guidance under the Electricity Law 2024 in relation to the development of renewable energy and new-energy electricity projects, with a particular focus on offshore wind power and rooftop solar power systems (RTS). Decree 58 introduces important regulatory clarifications concerning project eligibility, investor incentives, ownership restrictions, and compliance obligations for self-consumption systems. It also establishes a preferential regime to encourage early-stage investment in large-scale offshore wind projects. 

This legal update summarises the key changes and outlines the practical implications for developers, investors, and other stakeholders in the renewable energy sector.

1. Self-Generation and Self-Consumption RTS

Decree 58 reaffirms the self-generation/self-consumption framework established under Decree 135/2024/ND-CP, and classifies RTS projects into two groups:

1.1. Group 1 – Grid-Connected RTS Projects

These are connected to the national grid and may use grid electricity as a backup source. However, the sale of surplus electricity to the grid is only permitted if expressly licensed.

1.1.1. Sale of Excess Electricity

1. Up to 20% of electricity generated may be sold to Vietnam Electricity (EVN).
2. Tariff is based on the average market price published by the National Electricity System and Market Operator (NSMO), subject to the ceiling price for ground-mounted solar (currently VND1,184.90/kWh or US¢4.74/kWh).
3. Exceptions:
   1. Public-sector RTS projects cannot sell surplus electricity;
   2. No sales cap applies to projects in remote or underserved areas; and
   3. Sales limit includes electricity from batteries.

1.1.2. Notification and Registration Obligations

1. Projects <100kW: Notification to the Department of Industry and Trade (DOIT) and relevant authorities required.
2. Projects 100kW to <1MW (not selling electricity): Notification required.
3. Projects ≥1MW or intending to sell electricity: Registration with DOIT required.

Total installed capacity must not exceed the power source cap allocated under the provincial power development plans.

1.2. Group 2 – Off-Grid RTS Projects 

These are entirely independent systems for on-site consumption and are not connected to the national grid.

1.2.1. Sale of Surplus Electricity Prohibited

Off-grid RTS projects cannot sell electricity to EVN or any grid-connected supplier.

1.2.2. Notification Requirements

1. All off-grid projects must notify the DOIT and local electricity agent.
2. Required information includes capacity, connection type, consumption estimate, and model (pure self-use or combined with Direct Power Purchase Agreement).

Key Compliance Points:

1. All RTS projects must align with provincial electricity development planning unless exempted.
2. Exemptions apply to:

1. Small-capacity projects with no or negligible grid impact; and
2. Off-grid or non-export projects designed solely for internal use.

2. Incentives and Governance for Offshore Wind Projects

Decree 58 introduces a structured incentive regime for offshore wind, including tax, land, and power offtake guarantees.

2.1. Conditions for Incentive Eligibility

1. Investment policy approval before 1 January 2031;
2. Project must be within the 6,000 MW capacity limit under the national power development plans; and
3. Projects exceeding the cap or licensed after 2030 will follow new regulations then in force.

2.2. Incentive Types

1. Sea Area Use Levy
   1. Exempt during basic construction (maximum of three (3) years); and
   2. 50% reduction for the next nine (9) years.
2. Land Use & Rental Fees
   1. Full exemption during basic construction (maximum of three (3) years); and
   2. Further incentives under prevailing laws thereafter.
3. Power Offtake Guarantee
   1. EVN must contract at least 80% of electricity output during the loan repayment period (maximum of 15 years), unless otherwise agreed; and
   2. Excludes underperformance due to investor fault or grid absorption constraints.

2.3. Expiry and Transition

1. After the incentive period, general laws apply; and
2. Post-2030 approvals are subject to future policies.

3. Investor Selection and Ownership Structure

Decree 58 also regulates investor qualification and project transfer for offshore wind.

3.1. Classification of Investors

3.2. Electricity Export Projects

1. Vietnamese investors must hold >50% charter capital;
2. Export price ≥ domestic ceiling tariff for offshore wind (set annually by MOIT); and
3. Power Purchase Agreements must comply with Vietnamese law.

3.3. Transfer Restrictions

1. Transfer to foreign investors requires approval from four ministries: Defence, Public Security, Foreign Affairs, and MOIT.
2. Before COD: Transferee must meet all investor criteria.
3. After COD: Must comply with localisation and local participation obligations.

Conclusion and Outlook

Decree 58 is a significant step forward in Vietnam’s efforts to support the scale-up of renewable and new-energy electricity sources, particularly in the context of its Power Development Plan VIII (PDP8) targets and net-zero commitments. It introduces practical incentives for early movers in offshore wind and provides much-needed regulatory clarity for RTS developers.

That said, the full effectiveness of Decree 58 will depend on the issuance of follow-up guidance (especially from the MOIT and the Ministry of Finance), the timely allocation of provincial power development plan capacity, and the consistent implementation by local licensing authorities.

Next Steps for Market Participants:

1. Review current RTS project structures to assess planning and registration requirements;
2. Evaluate offshore wind pipeline eligibility for pre-2031 incentives;
3. Prepare for potential bidding processes and ownership structuring under the new investor rules; and
4. Monitor upcoming circulars to fine-tune project compliance strategies.

Please feel free to contact our Frasers team should you require further assistance navigating the new regulatory framework under Decree 58 or in structuring renewable energy investments in Vietnam.

Click here to download: Legal Update - Rooftop Solar, Offshore Wind, and New Energy Incentives Clarified (EN) - April 2025.pdf

This material provides only a summary of the subject matter covered, without the assumption of a duty of care by Frasers Law Company.
The summary is not intended to be nor should be relied on as a substitute for legal or other professional advice.

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