The investors had completed projects prior to 2020 before the deadline to be eligible for the FIT (feed in tariff) preferential selling electricity prices.

But now these investors face the risk of going bankrupt, just because they don’t have construction permits. The problem is that they don’t know where to go to obtain such a license.

“We are deadly worried,” said Nguyen Van T, an investor.

T is the developer of rooftop solar power projects in industrial zones which sell electricity to Electricity of Vietnam (EVN) at VND1,943 per kwh as stipulated in Decision 13/2020. However, the purchases may have to be stopped because he cannot submit enough legal documents as required by the law.

As for enterprises registering to use solar power with international buyers, the disassembling and operation suspension of solar power systems will increase the risk of losing orders.

The requirement stems from Dispatch 894/EVNSPC-KD+PC dated February 13, 2033 released by EVN SPC (Southern Power Corporation) which requires the developers of rooftop solar power projects to provide missing documents before March 31, 2023.

The legal document was released after the State Audit blew the whistle on payments to rooftop solar power projects that still did not have sufficient documents.

The dispatch warned that local power companies would disconnect rooftop solar power systems after June 30, 2023 if the required documents are not submitted.

The documents include one on appraisal and official acceptance of fire prevention and fighting conditions; construction permits and permits for work renovations and repair; and environmental permits and reports on environmental impact.

“If rooftop solar power systems have to suspend operation and don’t get paid, this will cause financial losses to investors,” T said.

“At the time when rooftop solar power projects boomed, there was no guideline about what kinds of licenses investors had to obtain to develop rooftop solar power projects,” he explained.

Enterprises visited local construction departments to ask about this, but construction permits were not being issued because the legal system did not mention this at that time, the departments said. 

Only in 2021 did provinces and new industrial zones (IZ)s begin to ask rooftop solar power projects to have these documents.

Before December 28, 2020, the Ministry of Construction (MOC) had not issued regulations on construction safety management, and the Vietnam Fire and Rescue Police Department had not released guidance on inspecting the design of fire prevention and control works prior to September 2020.

As investors were told to submit additional documents, enterprises contacted construction departments and district people’s committees where the projects operate to apply for construction permits. 

However, the departments said they could not grant permits to ready-installed works.

As a result, investors have fallen into a dilemma.

Replying to enterprises on March 15, the Dong Nai IZ Management Board cited Article 3 of the 2014 Construction Law as saying that competent agencies cannot grant construction permits to construction works that have been completed.

The interpretations of localities

According to EVN SPC, previously, to encourage investors to invest in solar power, SPC allowed investors to start executing projects first and submit documents later.

“If we had asked investors to submit documents immediately, no investor would have been able to put power plants into operation in accordance with Decision 13,” he explained.

The Binh Duong Construction Department, in its document to Binh Duong Power Company, said that the documents from relevant ministries are inconsistent about how to treat works installed prior to December 31, 2020, so local authorities are facing difficulties in promulgating guiding documents.

The local authorities of Binh Duong, where many rooftop solar power projects exist, have decided they will inspect the safety of solar power works while waiting for the Ministry of Construction to release guidance on permits. 

The works that satisfy the requirements on safety will be accepted. However, other provinces don’t do this.

Local authorities have asked the Ministry of Construction and the Ministry of Industry and Trade (MOIT) to give detailed guidance on the procedures for rooftop solar power investment to be applied throughout the country.

And for the time being, the worry that their solar power systems may have to suspend operation and cannot sell electricity to EVN is still hanging over investors.

Luong Bang