The FIT Reckoning: Vietnam’s Solar-and-wind Feed-in Tariff Dispute Puts Investor Trust at Risk

The payment mechanics are now central to the conflict. Vietnam Electricity (EVN), the state utility and primary off-taker, has withheld payments for affected projects or sought refunds for what it considers “excess” tariffs. EVN has also proposed retroactively cutting payouts by as much as 43% for electricity generated before projects received CCA approvals, replacing agreed FIT rates with a lower “transitional tariff” for that period. The proposal would also claw back prior payments through monthly installments, adding pressure to already levered project balance sheets. The affected portfolio is widely reported at about 12 GW of combined capacity, and it includes foreign investors such as SP Group, Sembcorp, and others that have petitioned for urgent dialogue to resolve the deadlock.

Why This Retroactive Review Collides With Vietnam’s Growth Targets

The timing matters because Vietnam is planning for rapid power-system expansion. Mordor Intelligence projects the Vietnam power market growing from 86.81 GW in 2025 to 95.46 GW in 2026, and reaching 153.62 GW by 2031, at a 9.98% CAGR for 2026–2031. In that same outlook, renewables held 56.85% of market share in 2025 and are projected to grow at an 11.46% CAGR through 2031. The revised PDP-8 is described as being underpinned by a US$136 billion policy push, with targets of 28–36% renewable energy by 2030 and 74–75% by 2050. Against that backdrop, a retroactive tariff fight signals to lenders and acquirers that contracted revenue may still be reopened.

Financing risk is also shaped by grid and contract realities. pv magazine notes that curtailment carries no explicit compensation mechanism in standard power purchase agreements, leaving developers and lenders exposed to grid-constraint losses. It also reports that National Power Transmission Corp. spent an average of US$700 million annually on transmission over the past five years, while the revised PDP VIII targets US$3.6 billion annually between 2026 and 2030. Meanwhile, broader system constraints have been visible: Mordor Intelligence says bottlenecks once stranded half of installed capacity and forced 2.56 billion kWh of imports from China in 2024. In this environment, retroactive FIT adjustments are not just a legal issue; they can compound uncertainty on cash flow, curtailment, and refinancing.

Investor groups say the stakes go beyond single-project economics. Eco-Business reports that 23 foreign investors representing 4,182 MW renewed requests for dialogue, warning that the impasse could push projects toward financial distress. The Business Times similarly reports warnings about financing defaults and the need to disclose significant losses if the situation persists. At the same time, Vietnam is trying to restore forward-looking pricing clarity: Mordor Intelligence cites new price caps for onshore wind at VND 1,959.4/kWh (USD 0.078) in the north and near-shore wind at VND 1,987.4/kWh (USD 0.079). Resolving the Vietnam solar and wind feed-in tariff dispute credibly may determine whether those newer mechanisms translate into bankable investment—or remain overshadowed by the precedent of retroactive change.