Key Takeaways
- Rooftop solar (“RTS”) power installations are permissible, based on two categories:
Category 1 – RTS systems not synchronized with the national power grid; or
Category 2 – RTS systems synchronized with the national power grid. - An annual quota for Category 2 permits will be set.
- Compensation tariffs (i.e. reduced tariffs payable by consumers based on their RTS generation).
- Technical and safety standards.
- One Window Web Portal.
Reinforcing Cambodia’s commitment to increasing renewable energy’s contribution to the national power generation portfolio, the Ministry of Mines and Energy (“MME”) has issued Prakas No. 0159, Launching of the Principles for Permitting the Use of Rooftop Solar Power in Cambodia, dated 25 April 2023 (the “RTS Principles”). This client alert provides a summary of the RTS Principles and its implications for stakeholders.
1. Permitted RTS systems, Category 1 or Category 2?
The RTS Principles identify guidelines for RTS power generation to service site-specific load.
The site must be owned by the RTS system owner, or installed with the site owner’s written permission, which indicates the duration of permission to use the premises. No third-party sales (e.g. direct power purchase agreements) of energy generated from the RTS system is permitted under the RTS Principles.
The RTS Principles apply to two categories of sites:
Category 1 – RTS systems at locations which are not synchronously connected to the national power grid; and
Category 2 – RTS systems at locations which are synchronously connected to the national power grid.
Category 1 and Category 2 permit applicants must show the maximum capacity of the RTS system and provide a justification to use the system for a duration of seven years. Construction must commence within six months for Category 1 and three months for Category 2 RTS installations, calculated from date of permit receipt. Moreover, it must be shown that Category 1 requests do not impact the electricity supply of the national grid.
2. Permit Issuance and Management Measures
(a) Procedure for Quota Setting
Since Category 2 installations are connected to and are positioned to impact the electricity supply of the national power grid, Category 2 requests follow a quota scheme. The quota scheme refers to the system of allocating potential for solar power development and is determined annually based on the capacity defined in the Power Development Master Plan for the electricity sector. Therefore, every year only a certain number of Category 2 permits for rooftop installations will be allocated, based on the electricity quota determined for the relevant province, provincial capital, or zone.
(b) Permit Transfers and Decommissioning
The RTS Principles also provide the procedures for change of site ownership and decommissioning of a RTS system, both of which require Electricity Authority of Cambodia (“EAC”) notification. Permits are not transferrable upon the site’s change of ownership. Instead, the EAC will revoke the existing permit and issue a new permit, as long as the system continues to comply with the conditions of the revoked permit.
(c) Principle of fairness in Electricity Price
The RTS Principles identify mechanisms to maintain balance and fairness between electricity consumers who have installed RTS systems and those who have not. This is achieved in a number of ways, such as regularly assessing and managing the installation cost of rooftop solar power, managing the cost of development of rooftop solar PV installations, combining utility-scale solar power with other sources, setting compensation tariffs for consumers of RTS power and allocating costs for rural electricity enterprises.
Importantly, consumers who have already installed an RTS system connected to the national grid must apply for permission within a specified timeframe after the first notification of the permitted quota by the EAC.
(d) Technical and safety standards
Compliance with technical and safety standards is required for both Category 1 and Category 2 installations. These standards, further clarified in the RTS Principles, cover generally electrical, civil works/physical structure, metering, earthing, and lightning protection requirements. Non-compliance may result in penalties or permit revocation.
3. Tariff Calculation
The RTS Principles offer two tariff schemes for Category 2 permit holders:
1) Pay for consumption used (to the distributor or EDC) at the usual rate:
= [units of electricity consumed from the supply of National Grid (kWh) x grid electricity tariff
(USD/KWh)]; or
2) Pay to EDC on the overall “Compensation Tariff of Variable Energy”:
= [General tariff for grid supply (USD/kWh) – cost of solar generation per kWh], calculated based on
the cost of solar generation per kWh as decided by EAC, from time to time]
In no instance shall the Compensation Tariff exceed the general tariff rate.
It is not outlined in the RTS Principles when either tariff calculation may be assessed.
4. One Window Service
The EAC will be responsible for establishing and managing a one-window-service web portal (a “One Window Service”). The EAC will issue a decision regarding the establishment and management of the One Window Service. The One Window Service will announce quotas and permits related to Category 1 and Category 2 applications, to keep users informed of the available opportunities, and will facilitate coordination among the different stakeholder involved in rooftop solar power.
Should you have any concerns or queries on the matters mentioned above, please feel free to contact us at cambodia@dfdl.com.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
