Sunny Outlook For Iran

White Paper Provides Background On Iranian Solar Market
  • Solarplaza publishes White Paper on Iran's solar potential
  • Only 17.3 MW of solar power installed in Iran from 2009 to 2014
  • Government targets 5 GW of renewables by 2020
  • Solar granted highest feed-in tariff among all renewables
  • Several international companies and countries express interest in developing solar in the country, says the report

The lifting of sanctions against Iran through the UN has many sectors dream big about business with the Middle Eastern country – this is also true for solar.PV events organizer Solarplaza from Holland has published a white paper, which provides an overview on policy and economics with regards to solar.

Titled "We Should Talk About Iran," the document says the country had an installed solar power capacity of 17.3 MW in 2014, which remained static from 2009 onwards. However, it pointed at some of the key deals between Iran and other companies in the PV space and countries that can potentially give a boost to its solar energy market.

Among these, the prominent ones included a plan to set up a super energy park with an annual capacity of 1 GW in Iran's Khuzestan, by some Iranian, Indian and South Korean companies. A German company also wanted to construct several power plants with a cumulative capacity of 1.25 GW in three cities. Spanish company Bester is said to assist Iran to develop renewable energy projects with special emphasis on solar.

Iran has nearly 82 million inhabitants, which are in average very young and well educated. Even during the sanctions, electricity consumption grew around 5% per year on average between 2000 and 2012, with a per capita demand of 2,765 kWh.

Almost all power is generated from gas and oil, while nuclear is expected to grow. In 2012, its share was only around 1%. The share of renewables was even smaller, but the solar irradiation is excellent – between 1999-2011, the average annual irradiation sum was at least 1,800 kWh/m2.

According to Solarplaza, wind will be the main beneficiary of the country's 5,000 MW renewables target. "While wind power will take up the lion's share, other types of green technologies, such as solar and biomass, will also receive significant support for capacity growth," says Zi Wang, the author of the report. The government, states the report, believes that this expansion would require an investment of around $200 billion.

However, a feed-in tariff scheme for renewables also compensates solar plants – and the incentives are the highest among all technologies. While PV systems smaller 20 kW receive 29.8 euro cents over 20 years per kWh, solar power plants larger 10 MW still receive 17.1 euro cents per kWh. Though the white paper doesn't explicitly estimate how much solar will be installed in Iran in the coming years – these high tariff levels will trigger gigantic solar demand, at least if the country sticks to its deal to use nuclear only for power generation.

The white paper "We Should Talk About Iran" can be downloaded here

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