Investing in Renewable Energy: How Decree 57 Reshapes Vietnam’s Regulatory Framework

Decree 57/2025/ND-CP (“Decree 57”) introduces capped tariffs, rooftop solar limits, and wholesale market integration for Vietnam’s renewable energy sector. Let us understand the new compliance, pricing, and infrastructure challenges that this decree brings.

Vietnam has revised its renewable energy framework with Decree 57, replacing Decree 80/2024/ND-CP (“Decree 80”) after only eight months of implementation. The new system establishes a direct power purchase agreement (DPPA) mechanism, enabling renewable energy producers to sell electricity directly to large consumers rather than through Vietnam Electricity (EVN).

Evolution from Decree 80 to Decree 57

FIND BUSINESS SUPPORT

Operational clarity for cleantech investment across Asia

Decree 80, issued in July 2024, was Vietnam’s first attempt to formalize DPPAs. However, it imposed rigid criteria that hindered adoption. Large electricity users were required to maintain an average monthly consumption of exactly 200,000 kWh and connect at 22 kV or higher, which excluded many potential participants. Its eligibility was limited to solar and wind plants of at least 10 MW, which cut out smaller and more diverse renewable projects.

The decree also lacked clarity on pricing rules for private grid connections and provided restrictive contractual templates. It was creating uncertainty for investors and, therefore, had slowed uptake.

Improvements under Decree 57

Decree 57 addresses these issues with the following improvements:

• Flexible eligibility: Instead of a fixed consumption threshold, eligibility is now as per regulations under the Vietnam Wholesale Electricity Market (VWEM), which allows the Ministry of Industry and Trade (MOIT) to adjust thresholds based on grid conditions;
• Expanded energy sources: Biomass plants of at least 10 MW are now eligible, in addition to solar and wind, recognizing the potential of Vietnam’s agricultural and forestry waste materials;
• Rooftop solar participation: Surplus solar power can be sold to EVN at prices equivalent to the previous year’s average market;
• Pricing reforms: Ceiling prices have been introduced for private grid transactions, but parties have flexibility to negotiate within these limits; and
• Contractual clarity: The decree removes prescriptive templates and gives developers, as well as buyers, more commercial freedom.

DPPA models: Private grid and grid-connected

The new decree has two DPPA models to accommodate different users and geographies.

Private grid (off-grid) model

The private grid model allows renewable energy generators to construct and operate dedicated transmission infrastructure connecting directly to large consumers without involving the national grid system. Renewable developers can now build and operate overhead lines, underground cables, transformers, and other infrastructure that connect directly to consumers. Rooftop solar producers are explicitly permitted to participate, unless otherwise restricted by contract.

Pricing is determined by negotiation between the parties, but it is subject only to MOIT ceiling rates. The model requires no formal registration, but consumers must report DPPA execution to local provincial committees, power companies, and system operators. It could especially be attractive to industrial parks, data centers, and manufacturing plants located near renewable generation sites.

Grid-connected (synthetic) model

FIND BUSINESS SUPPORT

Transform Information into Strategy with Tailored Intelligence

The grid-connected DPPA operates as a financial instrument rather than physical electricity delivery. Renewable energy producers sign power purchase agreements with EVN to sell electricity into the Vietnam Wholesale Electricity Market (VWEM) at spot prices. Simultaneously, consumers enter into retail power purchase agreements with EVN or its subsidiaries to receive electricity from the national grid. The commercial relationship between generators and consumers operates through forward contracts (Contract for Differences) that provide price hedging against wholesale market volatility.

The grid-connected model requires generators to maintain minimum capacities of 10 MW and participate directly in VWEM operations. Eligible consumers must connect at appropriate voltage levels and maintain consumption patterns meeting MOIT-defined thresholds. Then, large industrial consumers can access renewable electricity even when they are not located near generation sources.

Eligible renewable energy technologies and participants

Decree 57 features a broader renewable energy mix and a larger participant base, including:

• Biomass power plants can now join grid-connected DPPAs. Vietnam currently has nine plants over 10 MW with a combined capacity of 332 MW, and another 14 projects (300 MW) are expected by 2030. Biomass contributes to waste management, rural development, and employment through feedstock collection and processing;
• Rooftop solar systems may sell up to 20 percent of their generation to EVN and create new income streams for households and businesses; and
• Electric vehicle charging service providers are now recognized as large electricity consumers in line with Vietnam’s electrification goals.

Consumer eligibility is flexible as per different consumption history periods. Consumers with at least 12 months of consumption must prove threshold compliance at registration, and new entrants must commit to meeting thresholds within the first year.

Pricing framework and ceiling tariffs

Instead of unlimited price freedom under the earlier Decree 80, private grid DPPAs now operate under ceiling tariffs set by the MOIT. The ceilings reflect generation costs, which has components of fixed investment, operations, maintenance, and other variables.

For solar projects, the approved tariff ranges vary by technology and region (North, Central, South). Solar Power Maximum Tariffs (excluding VAT):

• Ground-mounted (no storage): VND 1,012-1,382.7/kWh (US$0.038-0.052/kWh);
• Floating solar (no storage): VND 1,228.2-1,685.8/kWh (US$0.046-0.064/kWh);
• Ground-mounted with battery: VND 1,149.86-1,571.98/kWh (US$0.044-0.059/kWh); and
• Floating with battery: VND 1,367.13-1,876.57/kWh (US$0.052-0.071/kWh).

Battery Energy Storage Systems (BESS) benefit from extra incentives, provided they meet following technical thresholds: storage capacity of at least 10 percent of plant capacity, storage duration of two hours, and delivery of at least 5 percent of power from stored output. The tariff design allows negotiation flexibility, but it cannot exceed MOIT ceilings.

Surplus sales and rooftop solar limits

The decree also puts limitations on surplus sales for rooftop systems. It limits excess electricity sold to the national grid to 20 percent of total generation output to ensure these projects serve on-site consumption rather than becoming commercial producers. State utility EVN has exclusive purchasing rights for such surplus electricity, and it pays either the previous year’s average market price or a mutually agreed rate.

Integration with wholesale electricity market

FIND BUSINESS SUPPORT

Boost Your Growth by Expanding into Asia’s Rapidly Growing Markets

Renewable energy generators participating in grid-connected DPPAs should get VWEM participation credentials. They also need to comply with dispatch instructions and maintain minimum capacity thresholds.

Electricity is sold in the spot market at competitive prices, and revenues are adjusted through forward contracts signed with corporate buyers. It creates a dual income stream when the spot market exposure is combined with hedging through long-term agreements.

Settlement and clearing operations now require some financial management skills. Generators must manage spot revenues alongside Contract for Differences (CfD) payments. EVN is required to publish annual updates on system service usage fees, clearing settlement charges, and distribution grid energy loss conversion factors, which will improve investor modeling but raise administrative burdens.

Regulatory enforcement and implementation gaps

MOIT has the job to oversee project approvals, reporting, and compliance, and provincial authorities supervise private grid notifications. Industry stakeholders have identified three primary implementation challenges requiring immediate attention: pricing frameworks for private grid connections, settlement costs for grid-connected transactions, and certification procedures for rooftop solar projects. 

Provincial restructuring also poses challenges. Vietnam’s transition from a three-tier to a two-tier government model has created jurisdictional uncertainty and slowed permit processing and approvals.

Contractual and commercial design

FIND BUSINESS SUPPORT

Identify Business Risks with Entity Health Checks and Partner Review Services

Private grid DPPAs rely on bilateral contracts that define pricing, delivery, and performance. Grid-connected DPPAs involve three separate contractual relationships: generator-EVN power purchase agreements for spot market sales, consumer-EVN retail power purchase agreements for electricity supply, and generator-consumer forward contracts for price hedging. 

On the other hand, Decree 57 also opens new opportunities. Renewable developers now gain direct access to corporate buyers, and can reduce their dependence on EVN. It is relevant given there are disputes affecting 173 feed-in tariff projects worth US$13 billion.

Multinational firms, like Samsung and Intel, that have 100 percent renewable commitments, can now source power through DPPAs and fulfil their ESG requirements.

Risks and unresolved challenges

Infrastructure remains the biggest constraint for renewable energy players. Transmission capacity has not kept pace with renewable growth, leading to severe curtailment in provinces like Ninh Thuan and Binh Thuan. EVN is struggling with under-investment in transmission because of below-cost electricity sales and delays in access approvals.

There are also regulatory risks. The ongoing disputes in FiT projects and potential for retroactive tariff adjustments create policy uncertainty for new investors. Many small-to-medium enterprises lack the capacity to evaluate or manage renewable energy procurement. The current 200,000 kWh/month participation threshold excludes numerous firms from DPPA eligibility.

Takeaway

Vietnam’s Decree 57 is a major step in advancing renewable energy by enabling direct sales between producers and large consumers. It is a reform for industrial users, agricultural producers, and clean energy investors as it integrates distributed systems like rooftop solar and EV charging infrastructure into the unified renewable ecosystem.

Decree 57 can bring Vietnam to the map of renewable leaders, if infrastructural and bureaucratic constraints are addressed well on time.

Read more: Amendments in Vietnam’s Investment Licensing: Highlights of Decree 239

(US$1 = VND 26,382)

• Previous Article Understanding Vietnam’s Middle Class in 2025: Size, Spending Patterns, and Opportunities for Businesses
• Next Article Vietnam to Simplify Administrative Procedures for Foreign Affairs