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BLOGXANH: XANHTERRA POLICY ANALYSIS
3 April 2026 · OPINION
Vietnam Clean Energy Transition · Southeast Asia
From Bangkok to Hanoi: What Thailand's Solar Incentive Gets Right—and How Vietnam Can Do Better
Learnings from the APEC Renewable Energy Workshop held in Bangkok on 31 March 2026 point toward a simple, market-compatible fix to Vietnam's stalled household solar program—one that requires changing just a few lines of law.
Ananth Chikkatur — Co-Founder & CEO, XanhTerra Energy advisory
Vietnam & Southeast Asia · Decarbonization · Renewable Energy · DPPA
BLOGXANH: XANHTERRA POLICY ANALYSIS
The XanhTerra Suggestion in Brief
The Incentive Gap
Vietnam's latest proposed household support package reaches ~USD 115 at maximum utilization (flat installation grant of VND 1–1.5M, plus BESS support of VND 1–1.5M, plus subsidized loans) — still roughly 50 times smaller than Thailand's equivalent (~USD 6,100), and funded from fragile provincial budgets that the Ministry of Finance has already questioned.
The Proposal
This article proposes adding a new article in Vietnam's revised Electricity Law 61 (due to Ministry of Justice by April 30, 2026): a Corporate Income Tax credit for certified solar installers, passed through to consumers as a transparent line-item discount at the point of sale — for both households and businesses.
The Design Principles
No price controls.
No new bureaucracy.
Auditable through Vietnam's existing e-invoice system.
Time-limited to 2030 under Resolution 253/2025/QH15.
Why It Matters Now
Apr 30 Deadline
Deadline for the Electricity Law draft to reach the Ministry of Justice — the window to act is weeks away.
Prime Minister Directive 10/CT-TTg (March 31, 2026) has just called for urgent RTS deployment across all sectors. The political mandate exists. The fiscal instrument does not — yet.
At this week's APEC Capacity Building Workshop on New and Renewable Energy Policy in Bangkok, delegates across the APEC economies compared notes on what it actually takes to move solar from policy aspiration to rooftop reality. Thailand's presentation was instructive—not because its program is a complete success, but because it illuminates, with striking clarity, exactly what Vietnam's current incentive design is missing.
The timing could not have been more apt: just the day before the workshop, Prime Minister Pham Minh Chinh issued Directive 10/CT-TTg, calling for urgent acceleration of self-consumed rooftop solar across all sectors—a clear signal that policy ambition at the top is running ahead of the fiscal instruments available on the ground.
What Thailand Got Right
Thailand's "Quick Big Win" package, launched in late 2025, centers on several interlocking policies, including: a personal income tax deduction of up to THB 200,000 (~USD 6,100) for the installation of residential solar rooftop systems from March 2026 to December 2028, a 1,500 MW community solar program under the "1 Sub-District 1 Power Plant" model, a solar-powered water pumping program for agriculture, and a nascent public building solar PPP scheme. Currently, only the first is genuinely operational. The community solar framework is still awaiting final tariff decisions, and the government building PPP remains pending regulatory finalization.
The residential tax deduction, formalized via Royal Decree No. 805 in March 2026, is elegant in its architecture. The consumer receives a deduction of up to THB 200,000 against personal income tax. The mechanism is off-budget (revenue foregone, not cash spent), requires no provincial allocation, and scales automatically with deployment. This supply-side pass-through approach echoes Australia's Cheaper Home Batteries Program, which since July 2025 has delivered an average 30% upfront discount on battery storage for households and businesses via the Small-scale Renewable Energy Scheme—with the discount applied directly by accredited installers at point of sale, not claimed by consumers after the fact.
"Thailand's tax deduction is worth roughly 50 times Vietnam's proposed household support package. The gap is not a difference in ambition—it is a difference in mechanism design."
Thailand's broader rooftop story is nonetheless sobering. Despite nearly two decades of solar policy, residential rooftop solar accounts for less than 1% of total PV capacity. The structural weakness is the net billing rate: surplus power sold to the grid fetches THB 2.20/kWh against a retail rate of roughly THB 4—less than half. Full net metering remains under consideration. The lesson: even a generous upfront incentive cannot substitute for a credible ongoing revenue model for the system owner.
Vietnam's Incentive Gap
The Proposed Package
Vietnam's proposed household solar support package—per the latest third draft—comprises:
A flat installation grant of VND 1–1.5 million (~USD 40–60) per household
An additional VND 1–1.5 million for BESS installation
Loan support of VND 4 million/kWp (up to 5 kWp) for solar
VND 2 million/kWh (up to 10 kWh) for BESS
At maximum utilization the direct grant support per household reaches roughly VND 3 million (~USD 115)—still a fraction of Thailand's equivalent of USD 6,100.
The gap is not principally a matter of political will. It reflects a deeper structural problem: Vietnam's subsidy is funded from provincial development budgets, making it hostage to annual appropriations, geographic inequality, and interministerial fiscal resistance. The Ministry of Finance (MOF), Ministry of Justice (MOJ), and State Bank of Vietnam have already flagged concerns about the mechanism, noting that even at these modest levels the VND 42 trillion cumulative cost over 2026–2030 poses a major challenge to provincial budget balance.
The PIT Base Problem
Vietnam's household solar market faces an additional structural constraint that Thailand does not. Vietnam's high rate of informal employment — estimated at around 65% of the workforce by the General Statistics Office — means a large share of households that could benefit from rooftop solar fall below the PIT threshold or outside the formal tax system entirely.
Under the new PIT Law 109/2025, the annual revenue threshold for PIT on business income has been raised from VND 200 million to VND 500 million—effectively exempting most rural households, agricultural workers, and small household businesses from PIT altogether.
A Thai-style PIT deduction would simply not help many Vietnamese individuals and households.
The fiscal instrument that makes sense in Bangkok does not translate cleanly to Hanoi or Can Tho.
Thailand vs. Vietnam: A Comparison
Policy mechanism
Vietnam RTS
The Right Fix: Move the Incentive Upstream
The solution in Vietnam lies in shifting the fiscal incentive from the consumer side to the installer side—and doing so through Corporate Income Tax rather than Personal Income Tax. Solar installation companies are formal CIT payers. They operate nationally. Their tax filings are auditable. And Vietnam's new CIT Law (67/2025/QH15), effective October 2025, has already opened a significant door: it now explicitly recognizes expenses related to greenhouse gas emission reduction and net-zero commitments linked to business activities as deductible expenses in determining taxable income.
This is, in its essentials, what the US Inflation Reduction Act did for electric vehicles: the tax credit flowed to the car dealer, who was legally required to pass it through as a point-of-sale discount, with the transaction recorded digitally and auditable by the US Internal Revenue Service. Our proposed Vietnamese adaptation is simpler, because it does not require a Treasury reimbursement mechanism—the installer simply claims the credit at year-end against their CIT liability, as they would any other incentive.
Core idea
Move the fiscal incentive upstream, make the installer the claimant, and require full pass-through to the customer.
The amount of credit can be set by the MOF, in coordination with the Ministry of Industry and Trade (MOIT), and fine-tuned depending on the uptake of RTS, over time.
01
Installation & Certification
A certified solar installer installs a self-production self-consumption RTS system, as described in Decree 58/2025/ND-CP.
02
CIT Credit Claimed
They claim a fixed CIT credit—not a deduction, but a credit, reducing their tax liability directly—per kilowatt-peak installed.
03
Pass-Through to Consumer
They are required to pass through the full value of that credit to the customer as a labeled line item on the electronic invoice, reducing the customer's final payable amount by exactly the credit value.
04
Market Competition Prevails
The installer's underlying price is not regulated. Market competition determines it. Prices can continue falling as panel costs decline. The credit simply amplifies whatever the market delivers.
05
MOF/MOIT Calibration
The amount of credit can be set by the MOF, in coordination with the MOIT, and fine-tuned depending on the uptake of RTS, over time.
The Legislative Vehicle: Law 61 Amendment
The current Electricity Law (61/2024/QH15) is already under revision. A 134-member drafting team led by the Deputy Minister of Industry and Trade has been constituted, with the draft due to the Ministry of Justice by April 30, 2026. This is the right moment—and the right instrument—to embed the installer CIT credit in statute.
A new article could sit within the renewable energy chapter of the amended law. While MOIT experts can draft the specific details of such an article, the key elements of our proposal are:
ILLUSTRATIVE TEXT FOR A NEW ARTICLE IN LAW 61
Article [X]. Corporate Income Tax Credit for Certified Self Production, Self Consumption Rooftop Solar Power Installations
1
Clause 1 — Entitlement
Enterprises registered under Vietnamese law that are certified as qualified solar installation service providers by the Department of Industry and Trade of the province or centrally-administered municipality in which the installation is performed shall be entitled to a corporate income tax credit equal to a fixed amount per kilowatt-peak of rooftop solar capacity installed and certified as connected to the national power system or to the customer's internal electrical system, during each tax year. This Article shall apply to installations completed on or before 31 December 2030, consistent with the time-limited incentive framework established under National Assembly Resolution 253/2025/QH15 on mechanisms and policies for national energy development for the 2026–2030 period.
2
Clause 2 — Eligible Installations
The tax credit under Clause 1 shall apply to: (a) rooftop solar power systems installed on residential buildings of households; (b) rooftop solar power systems installed on the buildings of enterprises, including factories, warehouses, offices, and commercial premises.
3
Clause 3 — Application of Credit
The tax credit shall be deducted directly from the corporate income tax liability of the qualifying enterprise in the tax year in which the installation is certified as complete. Any unused credit in excess of the enterprise's tax liability in that year may be carried forward for up to three consecutive tax years.
4
Clause 4 — Eligibility Conditions
To be eligible for the credit under this Article, the qualifying enterprise shall: (a) issue an electronic tax invoice to the customer reflecting the installed capacity in kilowatt-peak; (b) submit a completed installation notification to the relevant Department of Industry and Trade pursuant to the regulations on self-produced, self-consumed rooftop solar power; (c) itemize on the customer's invoice, as a separate and clearly labeled line item, a price reduction equal to the full amount of the corporate income tax credit claimed for that installation, such that the customer's final payable amount is reduced by no less than the value of the credit applicable to that installation.
5
Clause 5 — Delegated Regulations
The amount of the corporate income tax credit per kilowatt-peak, differentiated as appropriate between household and enterprise installations, the maximum credit per installation, and the certification requirements for qualified solar installation service providers shall be prescribed by the Government. The Ministry of Finance shall coordinate with the Ministry of Industry and Trade to issue implementing guidance on the administration, audit, and recovery of the tax credit under this Article within ninety (90) days of this Law taking effect. The Government shall also prescribe the minimum information required on customer invoices to evidence the price reduction required under Clause 4(c), and the consequences for installers who claim the credit without issuing compliant invoices to customers.
Key Elements of the Proposed New Article
Self Production, Self Consumption RTS Promotion
Scope (Clauses 1 & 2)
The article would cover both household and business premises from the outset, which is essential. The business RTS segment—factories, warehouses, commercial buildings—is where near-term deployment capacity is concentrated and where the economics are already strong. Restricting the credit to households would leave the highest-volume, most investable segment outside the incentive. The 2030 sunset is explicitly anchored to Resolution 253/2025/QH15, giving the provision political legitimacy and a clear fiscal horizon that the MOF can accept.
Pass-Through Obligation (Clause 4c)
This is a design innovation that distinguishes the proposal from a conventional corporate tax incentive. Rather than regulating what installers may charge—which would require MOIT to administer a price ceiling and risk freezing market prices—Clause 4(c) requires only that the customer receive a transparent, line-item reduction equal to the full credit value. The underlying market price is entirely unregulated. As panel costs continue their secular decline and installer competition intensifies, consumers benefit from both forces simultaneously. Enforcement is automatic: the General Department of Taxation can verify compliance through Vietnam's mandatory e-invoicing infrastructure, the same system already used to audit VAT. No new bureaucracy is needed.
Quantum and Administration (Clause 5)
The delegation to a Government Decree for the credit quantum is deliberate, as this allows the credit level to be calibrated to market conditions and adjusted over time without reopening the Electricity Law. A starting point of VND 1.5–2 million per kWp (~USD 58–77) would be economically meaningful—representing roughly 10–15% of a typical residential system cost—while remaining fiscally conservative. Differentiated rates for household versus commercial installations allow the Government to direct stronger incentives where social policy goals are highest.
Fiscal Analysis
2026–2030
Estimated Fiscal Impact
Annual Revenue Foregone
VND 2 Trillion
Per Year
At VND 2M/kWp credit and 1 GW/year new RTS deployment (~USD 77M) — under 1% of national CIT collections
The fiscal cost of this mechanism is revenue foregone from CIT—not cash expenditure from the budget. Solar installation enterprises already benefit from a preferential CIT rate of 10% (versus the standard 20%) as a renewable energy sector company.
Cumulative 2026–2030 Comparison
Proposed CIT Credit Mechanism
~VND 8–10 trillion (~USD 310–385M) cumulative foregone revenue at full deployment over 2026–2030.
Direct Provincial Subsidy
~VND 42 trillion (~USD 1.6 billion) direct subsidy estimated by MOIT to achieve the same 50% household adoption target through cash transfers — a program the MOF has already signaled is unaffordable.
The CIT credit mechanism achieves the same deployment objective at roughly one-fifth the apparent fiscal cost, and with zero annual appropriation risk.
A companion amendment to Article 5 (State Incentive Policies) could also add a single sentence establishing the policy principle at the normative level of the law, ensuring the MOF can effectively implement this authorized tax measure.
Why This Design Works for Vietnam
1
It is off-budget
The fiscal cost is CIT revenue foregone at the preferential 10% rate applicable to renewable energy companies—not provincial cash expenditure subject to annual appropriation battles. At a target of 1 GW of new household and business RTS per year and a credit of VND 2 million per kWp, the annual fiscal cost would be approximately VND 2 trillion (~USD 77 million)—well under 1% of national CIT collections, and entirely manageable within a time-limited program through 2030.
2
It bypasses the PIT base problem entirely
The consumer does not need to be a taxpayer to benefit. The benefit flows through the installer, who is always a CIT payer, to the consumer as a transparent invoice reduction. A household in rural Quang Tri benefits exactly as much as a business in Ho Chi Minh City.
3
It is market-compatible
By anchoring the pass-through obligation to the credit value rather than to an MOIT-defined price ceiling, the mechanism does not freeze market prices. As panel costs continue falling and competition among installers intensifies, consumers benefit from both the natural price decline and the credit amplification. The incentive gets more powerful over time relative to system cost, not less.
4
The audit trail already exists
Vietnam's mandatory e-invoicing infrastructure means every installation transaction generates a digital, GDT-accessible record. The same DOIT installation notification required under Decree 58/2025/ND-CP for systems under 100 kW becomes the trigger for the credit claim. No new bureaucracy. No new registry. No new reporting burden.
Conclusion
The urgency of this proposal is underscored by Prime Minister's Directive 10/CT-TTg— issued just a day before this APEC workshop—which explicitly calls for rapid expansion of self-produced, self-consumed rooftop solar across public offices, businesses, and households, targeting 10% annual adoption rates at both household and public office level through 2030 and mandating that all provinces develop local deployment plans. Directive 10 provides the highest-level political mandate for exactly the deployment outcome that the installer CIT credit is designed to accelerate; what it conspicuously lacks is a market-compatible fiscal instrument to translate that ambition into signed contracts and commissioned systems. The Law 61 amendment provides that instrument.
Vietnam is already ahead of Thailand on grid-connected BESS policy—Circular 62's two-part BESS tariff makes Vietnam the first major ASEAN economy with a bankable storage framework. On utility-scale solar market architecture, both countries are converging toward negotiated ceiling tariffs and eventually competitive auctions. The one dimension where Vietnam materially lags is the retail-level RTS incentive that can actually move households and businesses to act.
The installer CIT credit proposed here was born directly from the intersection of two events in the same week: Directive 10's clarion call for urgent RTS deployment, and the hands-on comparison of regional incentive models at the Bangkok APEC workshop. Seeing Thailand's Royal Decree 805 mechanism — elegant, off-budget, and nationally uniform — against the backdrop of Vietnam's stalled provincial subsidy scheme, and knowing that Directive 10 had just raised the stakes to the highest political level, crystallized our views on identifying new fiscal instrument designs to support Vietnam's ambition.
About the Author
Ananth Chikkatur
Ananth is Co-Founder & CEO of XanhTerra, an energy consulting and advisory firm operating in Southeast Asia. He holds a doctoral degree from MIT, conducted post-doctoral research at Harvard Kennedy School, and has 20+ years of energy sector experience.
Vietnam Energy
Rooftop Solar
Tax Policy
Incentives
Electricity Law 61
CIT Credit
Renewable Energy
Southeast Asia