Uzbekistan Eliminates Taxes For Solar Systems

• Uzbekistan has issued a decree announcing tax exemptions for distributed renewable energy systems
• Projects with up to 100 kW capacity installed from April 1, 2023 are covered under its ambit
• Masdar has also announced achieving financial closure for its 900 MW large scale PV projects in the country

Uzbekistan is seeing some accelerated activity in its solar market as the Ministry of Energy exempts certain taxes for distributed renewable energy installations and Abu Dhabi's Masdar announces financial closure for 900 MW large scale PV capacity in the country.

From April 1, 2023, individuals and legal entities installing renewable energy projects with a total capacity of up to 100 kW won't be required to pay property tax from these systems, land tax on land occupied by these, and profit tax on income generated by legal entities for selling electricity to the common grid.

The exemption will be in force for a period of 3 years from the date of commissioning.

These benefits will be extended to 10 years when installing electricity storage systems with a capacity of at least 25% of the installed capacity of solar panels.

According to a legal decree, details of which the ministry shares on its Telegram account, from May 1, 2023 it will be mandatory to install solar panels on at least 50% of the free part of the roofs of multi-story buildings. Additionally, all fuel stations of gasoline, liquified and compressed gas will need to cover at least 50% of their technical, domestic and lighting requirements from onsite solar panels.

From March 1, 2023, business entities and foreign investors have been allowed to sell renewable energy to state bodies, territorial electric networks at established tariffs to other consumers under long-term contracts to encourage distributed energy installations in the country.

As for large-scale projects, Masdar has achieved financial closure for 900 MW solar PV capacity paving the way for construction to begin on the projects in Uzbekistan's Sherabad, Samarkand and Jizzakh regions.

The European Bank for Reconstruction and Development (EBRD) says it has organized financial package of $205 million for these 3 greenfield projects for Masdar which will be co-financed by the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and the European Investment Bank (EIB).

With this financing, by 2024 Masdar will bring online 220 MW Nur Jizzakh in Kizzakh, 220 MW Nur Samarkand facility in Samarkand, and 457 MW Nur Sherabad project in Surkhandarya regions (see Masdar Wins Uzbek's Sherabad Solar Power Auction).

Masdar is also developing 250 MW solar and 62 MW battery energy storage system (BESS) Bukhara PV Project in Uzbekistan (see Uzbekistan's 500 MW Solar Power Auction Concludes). The company is targeting 100 GW renewable energy capacity and green hydrogen production of 1 million ton per annum annually by 2030.

Recently Saudi Arabia's ACWA Power secured investment and power purchase agreements (PPA) for 1.4 GW solar and 1.5 GWh storage in Uzbekistan that's aiming for 10 GW solar and 5 GW wind energy by 2030 (see Uzbekistan Firms Up Plans For GW-Scale Solar & Storage).