Than Trong Ly - Partner

Tran Thao Uyen - Associate

Duong Phuong Vy - Paralegal

On 03 March 2025, the Government issued Decree No. 58/2025/ND-CP (“Decree 58”) providing detailed guidance on several provisions of the Law on Electricity No. 61/2024/QH15 (“Electricity Law 2024”). Effective from 03 March 2025, Decree 58 focuses on mechanisms to promote rooftop solar power, offshore wind power, and other renewable energy power, with notable highlights as follows:

Incentives and support mechanisms for energy storage systems in renewable projects

One of the key highlights of Decree 58 are the establishment of priority dispatch mechanisms for renewable energy power. Specifically, renewable energy projects that incorporate energy storage systems and are connected to the national grid shall be granted priority in the dispatch of electricity during peak demand periods.

This mechanism not only enhances the efficiency of renewable energy exploitation but also helps reduce pressure on the power grid during high-load periods, thereby improving the flexibility, stability, and operational efficiency of the national electricity system.

Preferential policies for the development of new energy power

Decree 58 introduces special incentives for new energy power projects, including those generating electricity entirely from green hydrogen, green ammonia, or a combination of both. These projects, when supplying electricity to the national grid, will be entitled to the following incentives:

1. Exemption and reduction of sea area use fees

Enterprises will be exempt from sea area use fees during the basic construction period for up to 03 years from the commencement date and enjoy a 50% reduction in sea area use fees for the following 09 consecutive years[1], significantly reducing initial investment costs.

2. Exemption and reduction of land use and lease fees

The projects will also benefit from full exemption from land use and lease fees during the basic construction period, up to a maximum of 03 years from the commencement date. Thereafter, exemptions and reductions will be applied in accordance with investment and land laws[2].

3. Minimum contractual electricity output guarantee

The Government will guarantee a minimum contractual electricity output of 70% throughout the investment loan repayment period, which may extend up to 12 years[3]. This mechanism ensures revenue stability and cash flow assurance, providing investors with confidence in implementing long-term project.

4. Financial and tax policies

New energy power projects will have access to preferential loan sources and enjoy import tax exemptions for advanced equipment and technologies used in electricity production[4]. These are key incentives that facilitate the development of electricity from new energy sources.

Incentives for offshore wind power projects

The 2024 Electricity Law lays a clear legal foundation for investment, surveying, and investor selection in the offshore wind sector. Accordingly, Article 25 of the Decree provides that offshore wind projects approved or granted investment policy decisions before 01 January 2031, supplying electricity to the national grid and with a total capacity of 6,000 MW approved in the power development plan, will enjoy the following incentives:

1. Exemption from sea area use fees during the basic construction period (up to 3 years from the construction start date) and a 50% reduction in sea area use fees for the following 12 years;

2. Exemption from land use and lease fees during the basic construction period (up to 3 years), after which land incentives will follow the applicable investment and land laws; and

3. Long-term minimum contractual electricity output guarantee of 80% during the loan repayment period (up to 15 years), unless otherwise agreed between the investor and the power purchaser.

For projects whose investment policy is decided or approved by a competent authority after December 31, 2030, the applicable incentive mechanisms and preferential policies shall be implemented in accordance with the laws and regulations in effect at the time of such decision or approval.

Support for research and development of energy technologies

Decree 58 introduces a range of supportive policies to foster research and development in domestic energy technologies. Enterprises engaged in research and development and the production of solar panels, wind turbines, and power conversion equipment will enjoy incentives in taxes, land use, preferential loans, and high-tech workforce training.

The Government also aims to increase the localization rate in the renewable energy supply chain, gradually reducing dependence on imported technologies. This strategic approach strengthens national energy self-reliance and provides a foundation for long-term, sustainable development in the energy sector amidst global energy transitions.

Transitional provisions for rooftop solar power mechanisms

Decree 58 outlines specific transitional provisions for rooftop solar systems depending on their installation period:

1. For rooftop solar power systems installed before 01 January 2021 and already in commercial operation, any capacity expansion shall not include additional generation that increases the contracted capacity.

2. For rooftop solar power systems installed from 01 January 2021 until prior to the effective date of Decree 58, but which have not completed all required procedures under Decree No. 135/2024/ND-CP, the investors shall be required to complete such procedures in accordance with the new regulations set out in Decree 58.

3. With respect to applications for rooftop solar power systems developed for self-production and self-consumption, which include a proposal to sell excess electricity and were submitted prior to the effective date of Decree 58, such applications shall continue to be processed in accordance with the provisions of Decree No. 135/2024/ND-CP.

The issuance of Decree 58/2025/ND-CP enhances the legal framework and sends a positive signal for investment in renewable energy projects. However, enterprises must still wait for the Government to approve the list of offshore wind projects included in the revised Power Development Plan VIII, with consensus required from the Ministry of Agriculture and the Ministry of Natural Resources (formerly MONRE) to ensure alignment with the national marine spatial plan.

Moreover, to facilitate the allocation of offshore wind survey areas to investors, the Government needs to further amend regulations to harmonize with legal provisions on marine resource allocation.

Here is our advice on Highlights of Decree 58/2025 on the development of renewable and new energy power. If you are interested in or require legal advisory support regarding the above-mentioned matters. Please visit our DIMAC Website and other News Category to get the latest updates on legal advice and market experience sharing.