Report
Iran's electricity crisis drives belated solar investment
Iran's solar capacity has grown from about 0.7 GW to 5.3 GW in two years, according to SATBA, as power shortages force industry and government to seek alternatives. President Masoud Pezeshkian has cited contracts for about 80 GW of solar, though officials use the figure loosely and much of the pipeline lacks finance, equipment and grid connections.
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Iran's power system has struggled to meet demand. In summer 2024, demand approached 80 GW while available supply stood around 62 GW, according to an Iranian parliamentary assessment cited in the report. Winter demand spikes have led some plants to burn mazut, and scheduled cuts have hit households and factories. The head of the Tehran Chamber of Commerce's industry commission said some plants lost the equivalent of ten working days a month.
To ease the strain, Article 16 of the Knowledge-Based Production Leap Law requires industrial consumers above 1 MW to source 1% of their electricity from renewables in 2022, rising to 5% by 2027. The National Development Fund can cover up to 80% of qualifying project investment, and the central bank said $1.7 billion had been allocated for renewable projects by August 2026.
Sanctions still restrict banking, insurance, shipping and access to foreign currency, and most panels come from China. Iran's domestic manufacturing base can supply just 0.7 GW of equipment, though SATBA has promised guaranteed purchases for 2 GW of Iranian-made panels and financing for manufacturers.
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