Than Trong Ly – Partner
On 26 June 2026, Decree 243/2026/ND-CP took effect, amending and supplementing Decree 57/2025/ND-CP on the direct power purchase agreement (DPPA) mechanism, together with Decree 58/2025/ND-CP on the development of renewable and new energy. This is a significant round of reform that broadens the scope of application, liberalises pricing and streamlines procedures. Set out below are the key developments that investors and businesses in the energy sector should note.
Broader range of participants and eligible customers under the DPPA
Previously, the DPPA mechanism applied between renewable energy generators and large electricity consumers. Decree 243/2026 adds retail electricity units operating within industrial park and cluster models as eligible participants, and expands the category of large customers to include data centres, charging stations and posts, and battery swapping cabinets for electric vehicles connected at a voltage level of 22 kV or above.
This is a forward looking move. Data centres and electric vehicle infrastructure are two segments with rapidly growing demand for clean electricity, and they are frequently tied to the renewable energy commitments of multinational groups. Allowing these customers to access renewable power directly enhances Vietnam’s appeal to high technology investment and carbon neutrality capital flows.
Greater flexibility in transaction structure
The two forms of DPPA, namely sale and purchase through a private connection grid and through the national grid, remain in place. The new development is that retail electricity units within industrial park and cluster models may now enter into contracts directly under the DPPA mechanism through the national grid, rather than participating only on the basis of authorization from a large customer as was previously the case, save for urban areas and free trade zones.
This change gives operators of industrial parks, economic zones and industrial clusters an active role in supplying green electricity to customers within their areas. For industrial park infrastructure investors, it presents an opportunity to add renewable electricity supply as a competitive advantage when attracting secondary tenants.
Liberalisation of pricing and a higher cap on surplus electricity
For the DPPA through a private connection grid, the electricity price is now negotiated and agreed by the parties and is no longer capped by the ceiling of the applicable power generation price bracket. This carries significant commercial weight, allowing the parties to price according to the specific features of a project and their risk appetite, rather than being constrained by an administrative price ceiling.
In parallel, the proportion of surplus electricity from rooftop solar systems that may be sold to the grid has been raised from 20% to a maximum of 50% of actual output. Reducing wasted surplus and increasing revenue from the portion sold materially improves the prospect of capital recovery, thereby encouraging investment in distributed renewable generation.
Substantial simplification of the DPPA registration process
One of the clearest reforms is the simplification of the procedure for participating in the DPPA through the national grid. Under the new process, the parties agree to authorise a single representative to submit the registration dossier to the Electricity System and Market Operator. That body checks the validity of the dossier, reviews the output allocation ratio, reports to the Ministry of Industry and Trade, and notifies the official date of participation in the mechanism.
Removing the multiple layers of confirmation previously required before contract signing significantly reduces the time and compliance cost involved and accelerates project implementation. This is a welcome signal of administrative reform in the energy sector.
Key developments for self-produced and self-consumed rooftop solar power
Decree 243/2026 clarifies that rooftop solar power must be installed on the roof of a construction work that is a house or a work with a house like structure. This criterion helps define the scope of works eligible for the mechanism. However, as the notion of a “house like structure” has not been specifically defined, its application in practice is likely to require further guidance. Investors should exercise caution when assessing ancillary works or standalone structures.
On surplus electricity, in addition to raising the cap to a maximum of 50%, the Decree permits agreement on a proportion higher than 50% until the end of 31 December 2030 where the grid can accommodate it. This is a time limited incentive that creates room for projects implemented early in the coming period. The range of parties permitted to sell surplus electricity has also been extended to include works that constitute public assets, subject to the relevant legal conditions.
The Decree introduces a requirement to install a reverse power on off device (Zero Export), being a control device that either permits or prevents the export of active power to the grid. This device may be integrated within the inverter, within monitoring and control equipment, or provided as a standalone unit, so as to ensure safe operation of the power system. Investors should factor this technical requirement into the design and procurement stage from the outset.
Finally, organisations and individuals already selling electricity to the electricity utility from rooftop solar systems installed before 1 January 2021 may develop additional self-produced and self-consumed capacity, provided that this does not increase the capacity scale under the power purchase agreement already signed. This transitional provision allows existing investors to expand their self-consumption needs without affecting the sale and purchase arrangement already applied to their systems.
Recommendation
Decree 243/2026 continues the trend towards broadening, marketisation and simplification of the DPPA mechanism, while strengthening the incentives for rooftop solar investment. For energy investors and businesses, this is an opportune moment to review project structures, power purchase agreements, financial plans and technical requirements in order to take advantage of the new legal framework, particularly the incentives that are time limited to 2030.
The above is provided as a general legal update and does not constitute advice on any specific matter.
