The HCMC Power Corporation has signed contracts with 49 household and business consumers in the central Districts 1 and 3 who own rooftop solar power systems. They will now be billed depending on how much power they sell to the grid.

According to the utility, the city has more than 1,400 rooftop solar systems, many of which have been connected to the grid for a while now, but it has been unable to pay them because of the tax system.

Now, following instructions from the Ministry of Industry and Trade, the company, a subsidiary of state power monopoly Electricity of Vietnam (EVN), will start paying 9.35 cents per kWh for 20 years.

In dong, that translates into VND2,086 per kWh for those who linked up before January 1, 2018, and VND2,134 for those who linked this year.

From 2020 onwards the price will be fixed annually based on the exchange rate.

So far these households and businesses have provided four million kWh to the utility and the company has to pay them around VND8.5 billion ($365,000).

If the solar power producers are businesses with their own value-added invoices, 10 percent tax will be deducted. Households have to pay 2 percent on revenues of over VND100 million and zero tax below that.

Nguyen Tan Hung, chairman of HCMC Power Corporation, told VnExpress last year that rooftop solar panels can be an effective power solution for most households, but factors like weather and location have to be taken into consideration.

Vietnam currently relies largely on hydropower and thermal power for its electricity needs, but its hydropower potential is almost fully exploited and oil and gas reserves are running low. Their environment impacts have also been a concern.

The national electricity development plan envisages power generation reaching 130,000 MW in 2030 from 47,000 MW currently, meaning 83,000 MW would need to be added along with the requisite distribution infrastructure.

The development of clean energy will be crucial as Vietnam is expected to grow at 6.5 – 7.5 percent on average.