October 12, 2017

Iran Solar Energy Market


Iran’s potential for renewable energy is vast, possessing some of the best combined wind and solar resources in the region and the technical and engineering capabilities to realize it. The country’s reintroduction to the international community following the relieving of sanctions makes this a particularly exciting time for Iran’s renewable energy space.

With domestic power demand sapping the valuable export realization of hydrocarbons, fuel subsidies decreasing and a need for greater energy security, the Iranian government and policy makers are showing a significant interest in the renewables space. To highlight their commitment, they have set an ambitious target of 5GW of installed capacity from renewables by 2020 and SUNA, the country’s renewable energy organization, have established an attractive feed-in tariff which guarantees power purchase payments for 20 years.

While policies for wind power are more aggressive in the short-term, plans for solar capacity are ambitious in the long-term. Foreign partners in solar projects are essential as a lack of access to key solar technologies has presented a challenge to domestic companies.

With the recent removal of sanctions, Iranian companies will have greater access to a wider range of increasingly sophisticated solar technologies and financing to purchase and develop them.

The current total installed power capacity of Iran is 73GW, the government plans to increase this to over 100GW in the next few years. Currently power generated from renewable sources makes up less than 0.2% of this, with gas fired combined cycle and steam plants making up the largest proportion of the energy mix.

Electricity consumption has grown steadily in Iran over the last decade with an average year-on-year percentage increase of over 7%.

Some sources are predicting that, with a return to the international markets and an increase in manufacturing and construction, overall consumption could reach 444000 GWh by 2030.