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| Source: PV Magazine, Australia |
In a year, Vietnam's installed utility-scale solar capacity has gone from 10 MW to over 4 GW (4,000 MW), basically from nothing to 8% of capacity, though it will make up a smaller proportion of output because of solar's lower capacity factor. This expansion is to take advantage of a relatively high FIT (feed-in tariff) of $93.50/MWh, guaranteed for 20 years, which ended for new projects at the end of June. This extremely rapid expansion suggests that the FIT was set too high. However, this has moved Vietnam fast down the solar learning curve, which will make all future solar cheaper and easier to install. No doubt the next FIT set will be a lot lower, reflecting the government's experience of this FIT, plus the ongoing cost declines in solar. As I discuss here, Vietnam also has excellent wind resources.
There has also been a huge expansion in Australia's utility-scale PV capacity, only this time without the benefit of a generous FIT—although not nearly as fast as Vietnam's, installed utility scale PV capacity has still risen 5 fold. Whereas in Vietnam, the rapid expansion has been due to a generous FIT, and will fall back short term, in Australia utility-scale PV is expanding because its electricity is cheaper than the average wholesale price for grid electricity. And that isn't going to change, though future solar farms will increasingly incorporate 4 hours of storage, which will raise costs by US$13/MWh, based on US experience. Combined, solar plus storage will have a total cost way below the wholesale electricity price and the cost of new coal power stations. So we will likely surpass Vietnam's total utility-scale solar installed capacity over the next year.
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