The feed-in-tariff, 24 percent less than the earlier 9.35 cents, will be applicable for 20 years starting May 22 for projects approved in policy before November 23, 2019, that begin commercial operations before December 31 this year.

For all subsequent projects, there will be a bidding mechanism.

The southern province of Ninh Thuan, a solar power hotspot, has been exempt from the change. Approved projects that begin commercial operations this year will enjoy the old tariff for 20 years.

The government has also fixed the tariffs for rooftop solar at VND1,943 (8.38 cents) and floating solar at VND1,783 (7.69 cents).

The decision ends a nine-month wait for investors after the 9.35-cent rate expired on June 30 last year.

The high tariff set off a scramble to build solar farms, culminating in the establishment of 91 of them last year with a total capacity of 4,550 MW.

It overloaded the national grid, engendering an upgrade to the transmission infrastructure.

Solar plants with a total capacity of 25,000 MW have been licensed so far against the government’s target of 4,000 MW by 2025.

Experts have said that Vietnam, especially the southern region, has great potential for solar power development thanks to the large number of sunshine hours.