Some investors are planning to set up factories in Vietnam to make solar panels. However, the products to be churned out by the factories will not be used in Vietnam, but exported, because of the foreseeable high production costs.

Indochina Energy & Industry Company (ICE), a member of IC Holding Vietnam, 100 percent Vietnamese owned, plans to start the construction of the solar panel factory in the central province of Quang Nam, which has the investment capital of 400 million dollars.

Prior to that, First Solar, an US investor, also kicked off a project on making thin-film technology solar panels in HCM City, which has the investment capital of 300 million dollars and the capacity of 250MW. However, the solar panels with the size of 60X120 cm, capable to produce 80-85 watts per hour, which have the guarantee period of 25 years,.They will also target export markets, Europe and the US instead of the local market. It is because of the high production costs, estimates are at 100-150 dollars per panel.

On the official website of ICE, one can read that the factory located in the Chu Lai Open Economic Zone is the one making 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 operation of the factory, which comes after one year of construction, the factory will churn out the products equal to 30MW.

An official of the Quang Nam provincial people’s committee, said “the provincial authorities want the investor to make further investment 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 to pay alot 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 too low, at 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, which generate electricity from coal or oil, which are much cheaper than renewable energy, also find it hard to negotiate the sale of electricity to the Electricity of Vietnam, the only wholesale buyer.

Vietnam has announced the plan to apply the market-based pricing mechanism as of June 1, 2011, i.e, the electricity prices will be high 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, the agency, which draws up the policies on national energy development, is the first agency in Vietnam which has a solar energy panel system since November 2010. With the capacity of 12kw, the system can obtain the electricity output of 18,000 kwh per annum, which will help the ministry save 12 million dong in the electricity bill a year. However, the initial expenses prove to be very high, at 2 million euro, 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 develop renewable energy, especially solar and wind energy, because Vietnam has a good geographical position and the long coast from the north to the south. However, experts have pointed out that it is impossible to develop renewable energy if the government does not provide necessary support.

Source: DTCK