Why Iran


Iran’s Renewable Energy Potential

Iran has a vast potential in renewable energy sources, solar, wind, geothermal, which is not being properly harnessed; the renewable energy industry in Iran is at a nascent stage. There is vast potential for private sector activity in energy sector and also in expanding capacity in renewable energy, especially for rural electrification.

Solar Energy

greenenergyLocated on the earth’s solar radiation belt and having a high potential has created scope for expanding solar technologies in Iran. Iran’s climate is diverse, and many of its regions are arid.

Iran’s unique geographical position means 90% of the country has enough sun to generate solar power 300 days a year. Iran has 520 watts per hour per square meter of solar radiation every day. The solar energy in the country varies from 2.8 kWh/m2 in day in the north to 5.4 kWh/m2 in day in the south. The average sunshine hours are estimated 2800 h per year nationally and 3200 h in the central part of Iran due to the hot and dry climate.

Regarding studies by DLR company from Germany, there is feasibility of installing 60 GW solar-thermal power plant in more than 2000 square kilometers of area. By allocating 100*100 square kilometers ground to PV power plant, we can generate electricity equal to total electricity produced in the country.

The heavy involvement of foreign partners in solar projects is practical, as well as economical. A lack of access to key solar technologies like inverters for voltage control and appropriately advanced semiconductors has presented logistical challenges to domestic Iranian companies.

With the recent removal of sanctions, Iranian companies now have greater access to a wider range of increasingly sophisticated solar technologies and financing to purchase and develop them. The immediate benefits will be their rapid installation and, in the long-term, the country is likely to benefit from gaining the ability to produce a significant amount of its solar infrastructure domestically.



Considering its vast area, diverse climatic regions, high altitudes ، vast plains and long coasts, there are numerous windy areas in Iran. In the present conditions more than 15 GW economic potential and 40 GW technical potential have been recognized all over the country.


Maximum generated electricity potential from all types of biomass power plants for cities populated 250000 and above (30 cities) is more than 800MW including: 217 MW pyrolyze – gasification power plant, 311 MW waste incineration power plant, 159 MW anaerobic digest power plant and 112 MW landfill power plant.

The Necessity of Renewable Energy Develpment in Iran

On September 28, 2015, before the United Nations General Assembly, a new chapter started in Iran’s relations with the world. This development emerges from the conclusion of over a year of negotiating efforts concerning the Islamic Republic of Iran’s nuclear program with the P5+1, which resulted in the Joint Comprehensive Plan of Action (“JCPOA”).

On 16 January 2016, the EU lifted all nuclear-related economic and financial sanctions against Iran. This welcome development allows the EU and Iran to start a gradual engagement, which will take place on the basis of the full implementation of the JCPOA by Iran. It could also comprise an increased use of clean energy and efficient energy demand management, and encouraging transparent, rule-based and well-functioning regional and global energy markets. It seems that development of renewable power plants in the country can be regarded as a strategic task.

With the removal of international sanctions, the government envisions a greater role for nuclear and renewable energy in combatting the effects of climate change. Shortly before last year’s UN Climate Change Conference in Paris (COP21), Iran pledged to cut its greenhouse gas (GHG) emissions by 12 percent by 2030. More recently, depressed oil prices have cemented political determination in Iran to reduce fossil fuel subsidies and transition to a more diverse national energy mix.

Vision, Goals and Important Policies

Iran has set up an aggressive growth plan to boost green energies as a key sustainability factor as part of the economic diversification goal under its sixth Development Plan. In cooperation with the Renewable Energy Organization of Iran (SUNA), the government recently introduced guaranteed twenty-year power purchase contracts that offer developers an attractive fixed price for electricity produced from renewables. These benefits, coupled with a 20-year-long Iranian government power purchase guarantee, have already had the effect of occasioning significant interest among foreign firms. As a result, the government has inked agreements with various international firms to develop solar power plants in several parts of the country, including near the capital, Tehran.

National document of Iran for the development of knowledge-based renewable energy is passed:

  • Iran plans to boost renewable energy share in primary energy supply to 3% by these goals defined:
    • Achieving a 10% share of renewable power generation capacity installed in the country regarding the total in 2025; (10 GW)
    • Achieve a 1.5% share of renewable heat to the total heat consumption in 2025; (10 GW)
    • Iran plans to boost industrial-scale consumption of biofuels share in fuel basket so that total petrol and gas oil reforms to “gasoline B5 and gas oil E2 to be used in the country.
  • Fiscal incentives and Feed in Tariffs for renewable energy include investment/production tax credits and energy production payment. Payment remarks:
    • 20 years contract
    • Adjustable rate (inflation, exchange rate fluctuation)
    • After the end of the contract: bilateral contracts, energy exchange, electricity market
    • 18 months deadline for power plant deployment.
    • Decreasing feed in tariffs in the future in proportion with increasing installed capacities.
    • By 30% bonus for enjoying domestic capabilities (know-how, technology, equipment and production)
    • The Renewable Energy Organization of Iran (SUNA) is responsible to take care of this policy in preparing tariff draft in the coming years.
  • Foreign Investment Promotion and Protection Act (FIPPA)
    • General Criteria for Admission of Foreign Investments
    • Guarantee and Transfer of Foreign Capital