Indochina Energy & Industry Company (ICE), a member of IC Holding Vietnam and 100 per cent Vietnamese owned, plans to start the construction of a solar panel factory in the central province of Quang Nam, with an investment capital of 400 million dollars.
Prior to that, US investor First Solar also kicked off a project on making thin-film technology solar panels in HCM City, which has an investment capital of 300 million dollars and the capacity of 250MW. The solar panels with the size of 60X120 cm are capable of producing 80-85 watts per hour and have a guarantee period of 25 years. They will however, be targeting the export markets, Europe and the US instead of the local market because of the high production costs which are estimated at 100-150 dollars per panel.
It is the factory located in the Chu Lai Open Economic Zone making the solar panels with thin-film technology A-Si, which has the capacity equal to 120MW. The technology copyright and the most important equipment for the factories will be imported either from the US or Europe. Supporting equipment and the production line assembling will be undertaken in Asian countries before they are carried to Vietnam in order to help reduce the investment costs.
It is expected that in the first phase of the factory’s operation, the factory will churn out products equal to 30MW.
An official of the Quang Nam provincial people’s committee, said “the provincial authorities want to further investments to generate electricity from solar energy in Chu Lai, which will help increase the value of the production in Vietnam.” However, the dream of making solar electricity to be provided to the national grid still cannot come true at this moment because of the electricity pricing scheme.
Currently, neighboring countries accept the fact that they have to pay a lot to purchase solar electricity. Thailand, for example, pays 49 US cents per kWh, while China pays 22 cents. Meanwhile, the retail electricity price in Vietnam is as low 1242 dong per kwh, or a little higher than 6 cents. It is clear that the low electricity price is not attractive to investors.
Even the power plants generating electricity from coal or oil and are much cheaper than renewable energy, are having difficulties negotiating the sale of electricity to the Electricity of Vietnam, which is the only wholesale buyer.
Vietnam has announced the plan to apply the market-based pricing mechanism on June 1, 2011. The electricity prices will be sufficient enough to cover expenses and bring profit to power generators. However, analysts still believe that many obstacles will still exist in the sale of clean electricity, unless the State applies necessary policies to encourage the development of clean energy.
The Ministry of Industry and Trade, which draws up the policies on national energy development, is the first agency in Vietnam to have a solar energy panel system with the capacity of 12kw. The system can obtain the electricity output of 18,000 kwh per annum, which helps the ministry save 12 million dong in the electricity bill a year. The initial expenses, however, proved to be very high at 2 million euro, which is funded by the German government.
Le Duong Quang, Deputy Minister of Industry and Trade, admitted “that there are many obstacles to the development of renewable energy in Vietnam, especially the high initial investment and the high production costs.”
Environment protection organizations have urged Vietnam to pay more attention to the development of renewable energy, especially solar and wind, since Vietnam has a good geographical position and the long coast from the north to the south. However, experts have also pointed out that it is impossible to develop renewable energy if the government does not provide the necessary support.
