MODEL POWER PURCHASE AGREEMENT FOR ROOFTOP SOLAR POWER PROJECT IS AMENDED FROM 25 APRIL 2019

28/03/2019, 08:20 AM

Ministry of Industry and Trade has just promulgated Circular No. 05/2019/TT-BCT ("Circular 05") amending and supplementing some articles of Circular No. 16/2017/TT-BCTdated 12 September 2017 of the Ministry of Industry and Trade ("Circular 16") regulates the project development and the Model Power Purchase Agreement applied to solar power projects, effective from 25 April 2019. Pursuant to Circular 05, some policies relating to rooftop solar power projects are amended as follows:

Abolishing the net-metering mechanism

Circular 05 abolished the payment calculated by net-metering mechanism for rooftop solar power projects. Particularly, amount of power loaded from project to grid and amount of power received from grid will be separately calculated without using net-metering mechanism.

Guiding the mechanism of calculating power purchase price

From 01 January 2018, power purchase price for rooftop solar power project will be based directly on the central exchange rate of Vietnam dongs against the US dollar announced by the State Bank of Vietnam on the last announcement day of previous year.

Amending the model power purchase agreement

According to Circular 05, the model power purchase agreement is amended in the following direction:

  • The annual power purchase price of agreement will be amended based on the central exchange rate of Vietnam dongs against the US dollar announced by the State Bank of Vietnam on the last announcement day of previous year;
  • Regulating on monthly payment for amount of power loaded from project to grid to project owner being enterprise and project owner being individual or organization other than enterprise;
  • There is no longer regulation on the net-metering mechanism;
  • Regulating the payment and invoice issuance of value added tax to the revenue from power loaded from project to grid.

Thus, Circular 05 and the attached model power purchase agreement provided the particular instructions for payment and invoice issuance of rooftop solar power projects. With these regulations, problems when applying net-metering mechanism have been removed, helping project owners and power buyers to implement power purchase agreement more effectively.

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