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Constraints to the uptake of solar home systems in Ho Chi Minh City and some proposals for improvement

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  • Baulch, Bob
  • Duong Do, Thuy
  • Le, Thai-Ha

Abstract

This study examines the constraints to the uptake of Solar Home Systems (SHS) in Ho Chi Minh City (HCMC), Vietnam. SHS are photovoltaic systems which generate electricity for residential properties. The limited numbers of SHS installed in HCMC are mostly on-grid systems with backup batteries to supply electricity to residential properties during evenings and/or power cuts. Semi-structured interviews with SHS installers, manufacturers and users, plus government agencies and technical experts identify pricing, regulatory issues and the cost of systems as major constraints. Cost-benefit analysis is then used to estimate the financial rates of return and payback periods for three representative SHS. Introducing net metering with a price equal to the proposed tariff of VND 3250/kWh would generate financial rates of return of over 7.5% and shorten the payback periods for the two larger systems from more than 30 years to 12 or 13 years. Smaller off-grid kits are already competitive with small, stand-alone diesel or gasoline generators. In the next five years, reforms to Vietnam's electricity market can be expected to green the energy mix and make SHS more finally attractive. SHS therefore represent a promising technology for HCMC in the future.

Suggested Citation

  • Baulch, Bob & Duong Do, Thuy & Le, Thai-Ha, 2018. "Constraints to the uptake of solar home systems in Ho Chi Minh City and some proposals for improvement," Renewable Energy, Elsevier, vol. 118(C), pages 245-256.
    • Handle: RePEc:eee:renene:v:118:y:2018:i:c:p:245-256
    DOI: 10.1016/j.renene.2017.10.106
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    1. Wamukonya, Njeri, 2007. "Solar home system electrification as a viable technology option for Africa's development," Energy Policy, Elsevier, vol. 35(1), pages 6-14, January.
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    Cited by:

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    9. Sopin Jirakiattikul & Tran Thi Lan & Kuaanan Techato, 2021. "Advancing Households’ Sustainable Energy through Gender Attitudes towards Rooftop PV Installations: A Case of the Central Highlands, Vietnam," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    10. Xuan Cuong Ngo & Thi Hong Nguyen & Nhu Y Do & Duc Minh Nguyen & Dai-Viet N. Vo & Su Shiung Lam & Doyeon Heo & Mohammadreza Shokouhimehr & Van-Huy Nguyen & Rajender S. Varma & Soo Young Kim & Quyet Van, 2020. "Grid-Connected Photovoltaic Systems with Single-Axis Sun Tracker: Case Study for Central Vietnam," Energies, MDPI, vol. 13(6), pages 1-14, March.
    11. Tran, Trung & Hanh, Vu Thi & Hoang, Hanh Phuong & Ho, Manh-Toan, 2019. "Dấu ấn KHXHNV Việt trên các tạp chí quốc tế có hệ số tác động cao năm 2018," OSF Preprints vmcsz, Center for Open Science.
    12. Muhammad Awais Baloch & Danish, 2022. "CO2 emissions in BRICS countries: what role can environmental regulation and financial development play?," Climatic Change, Springer, vol. 172(1), pages 1-14, May.
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    14. Fathabadi, Hassan, 2020. "Novel solar-powered photovoltaic/thermoelectric hybrid power source," Renewable Energy, Elsevier, vol. 146(C), pages 426-434.
    15. Haiying Liu & Avik Sinha & Mehmet Akif Destek & Majed Alharthi & Muhammad Wasif Zafar, 2022. "Moving toward sustainable development of sub‐Saharan African countries: Investigating the effect of financial inclusion on environmental quality," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 2015-2024, December.
    16. Maxwell Chukwudi Udeagha & Marthinus Christoffel Breitenbach, 2023. "The Role of Financial Development in Climate Change Mitigation: Fresh Policy Insights from South Africa," Biophysical Economics and Resource Quality, Springer, vol. 8(1), pages 1-34, March.
    17. Alipour, M. & Salim, H. & Stewart, Rodney A. & Sahin, Oz, 2020. "Predictors, taxonomy of predictors, and correlations of predictors with the decision behaviour of residential solar photovoltaics adoption: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    18. Seemab Ahmad & Dilawar Khan & Róbert Magda, 2022. "Assessing the Influence of Financial Inclusion on Environmental Degradation in the ASEAN Region through the Panel PMG-ARDL Approach," Sustainability, MDPI, vol. 14(12), pages 1-17, June.
    19. Qiong Shen & Rui Wu & Yuxi Pan & Yanchao Feng, 2024. "Explaining and modeling the impacts of inclusive finance on CO2 emissions in China integrated the intermediary role of energy poverty," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-19, December.
    20. Najia Saqib & Ivan A. Duran & Nazia Hashmi, 2022. "Impact of Financial Deepening, Energy Consumption and Total Natural Resource Rent on CO2 Emission in the GCC Countries: Evidence from Advanced Panel Data Simulation," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 400-409, March.
    21. Xuan Hoi Bui & Phuong Thao Nguyen, 2022. "Determining the Offshore Wind Power Potential in the Mix-electric Power of Vietnam: The Role of Feed-in Tariff Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 11-19, March.
    22. Li, Jiaman & Dong, Xiucheng & Dong, Kangyin, 2022. "How much does financial inclusion contribute to renewable energy growth? Ways to realize green finance in China," Renewable Energy, Elsevier, vol. 198(C), pages 760-771.
    23. Do, Thang Nam & Burke, Paul J. & Baldwin, Kenneth G.H. & Nguyen, Chinh The, 2020. "Underlying drivers and barriers for solar photovoltaics diffusion: The case of Vietnam," Energy Policy, Elsevier, vol. 144(C).

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    More about this item

    Keywords

    Solar home systems; Vietnam; Electricity; Payback period;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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