CaliToday (09/9/2025): Vietnam's celebrated clean energy sector, which has seen explosive growth over the past five years, is facing a critical moment of uncertainty. A key government incentive program that fueled this expansion is set to expire, creating a policy vacuum that threatens to halt new investment and could put more than 70,000 jobs at risk, according to industry experts.
The situation presents a major dilemma for the Vietnamese government as it seeks to balance the costs of subsidies with the urgent need to continue its transition towards sustainable energy and meet its ambitious international climate commitments.
The Engine of Growth: Feed-in Tariffs (FITs)
At the heart of Vietnam's renewable energy success has been the government's Feed-in Tariff (FIT) mechanism. This policy guaranteed renewable energy producers a fixed, above-market price for the electricity they supplied to the national grid over a 20-year period. This price certainty was the "giant incentive" that de-risked investments and attracted billions of dollars in both foreign and domestic capital, turning Vietnam into a global leader in solar and, more recently, wind power development.
The FIT scheme was so successful that it helped the country surpass its own renewable energy targets years ahead of schedule. However, this rapid, policy-driven boom also placed significant strain on the national power grid and raised questions about the long-term cost of the subsidies. As a result, the FIT program for new projects was designated to be phased out, but a clear successor policy has yet to be implemented.
The High Stakes: Jobs and Future Investment
With the FIT program expiring, the entire clean energy industry is now in a state of limbo. The most immediate and alarming consequence is the potential for massive job losses. Industry associations warn that more than 70,000 workers—employed across the value chain in manufacturing, project development, construction, installation, and maintenance—face an uncertain future.
Beyond the direct impact on employment, the policy gap has frozen the pipeline for new projects. Investors are unwilling to commit to multi-million-dollar wind and solar farms without a clear framework for how, and at what price, their electricity will be sold. This has led to a near-total halt in new project planning and could reverse the incredible momentum built over the last few years.
A Threat to National Climate Goals
This looming crisis comes at a critical time for Vietnam. At the 2021 COP26 Climate Summit, Prime Minister Phạm Minh Chính made a bold commitment for Vietnam to achieve net-zero carbon emissions by 2050. The country's recently approved Power Development Plan 8 (PDP8) also heavily prioritizes the expansion of renewables.
Industry leaders argue that allowing the clean energy sector to stagnate would make these national goals nearly impossible to achieve. A consistent, predictable, and long-term policy framework is seen as essential to unlock the next wave of investment needed to help Vietnam decarbonize its economy and ensure its energy security.
As the deadline passes, all eyes are on the Ministry of Industry and Trade and the Vietnamese government. The industry is urgently calling for a new, transparent support mechanism—potentially a move from fixed FITs to a more competitive auction-based system—to provide the clarity needed to resume development. The government's next decision will be a crucial determinant of whether Vietnam's clean energy revolution continues or faces a prolonged and damaging pause.
