The impact of policy instruments promoting solar energy development in Vietnam

Vietnam was entering a period of transformation in the field of renewable energy, especially solar energy (installed solar power capacity was 16,000 MW in 2023, intending to increase to 25,320 MW in 2030). Although the solar energy potential in Vietnam is immense (average solar radiation is about 4.5 - 5.6 kWh/m²/day), development still faces many challenges: high initial investment costs for solar power systems (1,200 - 1,800 USD/kW), lack of infrastructure and technology, legal and management barriers, have slowed down the development speed. Compared to ASEAN countries with many similarities in developing this industry, such as Indonesia (solar power capacity was 2,100 MW in 2023), Vietnam faced an excellent opportunity to surpass. This study analyzes the development of renewable energy in ASEAN and delves into specific promotion instruments for solar energy in Vietnam. Cost-benefit analysis was conducted to compare economic benefits with investment and operating costs. Government instruments had different levels of influence on various aspects, and the most influential were the FIT tariff (243.75 points) and tax exemption (49.71 points). Although solar energy in Vietnam is developing rapidly, it is still necessary to improve and develop reasonable allocation strategies for supporting policies and incentive mechanisms to optimize economic benefits. JEL Codes: Keywords: policy instruments, solar energy, renewable energy, energy transition, sustainable development, sustainability goals, FIT.