Iran's Solar Capacity Expands Fivefold

Iran’s renewable power capacity has risen sharply, with solar installations expanding more than fivefold and total renewable capacity reaching 4,162 megawatts, a senior energy official said.

Mehdi Hosseini, director general for planning, budget and regulation at the Renewable Energy and Energy Efficiency Organization (SATBA), said renewable capacity under the current administration has increased by around 2.5 times compared with all previous periods combined.

He described renewable development as a key priority amid persistent electricity shortages affecting both industrial and household consumers.

Hosseini said substantial financial resources have been injected from the National Development Fund of Iran, and that a new financing model approved by the Economy Council in August shifted from loan-based funding to joint investment with the private sector.

Under current plans, renewable capacity is targeted to reach 11,000 MW by the end of the next summer peak season, with the longer-term objective of achieving 12,000 MW under the Seventh National Development Plan expected to be met by the end of next year (March 2027).

He said renewable expansion, alongside efficiency improvements and integration with thermal power plants, could help reduce the country’s electricity imbalance.

To stimulate demand in the green power market, Hosseini pointed to government and Supreme Energy Council resolutions requiring industries to source 20% of their electricity from renewables starting in 1407 (March 2028), while government buildings must secure 40% of their electricity from renewable sources or through the green energy exchange.

He added that enabling household participation in the green exchange, expanding renewables in industrial parks and introducing capacity certificates are among measures under way to accelerate deployment.

Hosseini described solar power plants as the lowest-risk renewable investment option, citing their independence from fuel supply uncertainties that affect gas-fired plants.

He also said the potential launch of a carbon market or access to international carbon revenue streams could raise internal rates of return for renewable projects by 5% to 10%, further enhancing investment appeal. - Tehran Times