| Technology type and capacity | Tariff (Rials per kWh) | Tariff (€ cents per kWh) | |
|---|---|---|---|
| Wind farm | > 50MW * | 3400 | €0.10 |
| < 50MW | 4200 | €0.12 | |
| Solar farm | > 30MW * | 3200 | €0.09 |
| 10MW < Capacity <30MW | 4000 | €0.12 | |
| <10MW | 4900 | €0.14 | |
Uncertainty surrounds the number and nature of solar projects that have been awarded a feed-in tariff (FiT) under Iran’s newly minted PV support programme. Although memorandums of understanding have been announced between the Renewable Energy Organization of Iran, or ‘SUNA’, and a number of solar developers, no definitive list of FiT winners appears to have been published.
“If you come across a list of projects that have obtained the feed-in tariff, please send it my way,” one solar analyst told Solarplaza. “I'm giving up on it.”
Nevertheless, SUNA has indicated that the volume of dead-end project applications it has received already has forced it to review its licensing policy, according to Michelle Davies, head of clean energy and sustainability at the law firm Eversheds. “SUNA is understandably concerned about the lack of progress on project development. Accordingly, the grant of new licences may be limited to one per developer, and for smaller projects only, before multiple licences or licences for larger projects are granted. It is a form of pre qualification in that developers will have to prove to SUNA that they are committed and have the ability to develop and construct projects before being given access to more,” she said.
In practice it is thought first-time applications will be capped at around 20 MW. Developers already holding licences will not be affected, but may be subject to close scrutiny and possible loss of licence if projects are not progressed quickly.
During presentations in May this year, SUNA confirmed that its 20-year power-purchase agreements (PPAs) for renewable energy would be offered on a first-come, first-served basis up to a total installed capacity of 5 GW.
SUNA committed to granting construction permits within a week of receiving developers’ submissions.
After this the developer would have six months to request a PPA or apply for environmental, grid connection and land use permits. Solar FiTs will be dependent on developers completing plant construction within 15 months of getting a PPA. After the PPA expires the plant owner will be free to sell power into Iran’s energy market.
The FiTs for solar power announced this year range from IRR3,200 (USD$0.11) per kWh for plants over 30 MW, to IRR4,900 ($0.16) per kWh for projects under 10 MW. Plants in between will get a FiT of IRR4,000 ($0.13) per kWh. Projects connected to the distribution network will get an additional IRR148 ($0.005) per kWh.
Payments are to be made in Iranian Rials, monthly in arrears, with an adjustment for inflation and exchange rate fluctuations against the euro being applied every month.
After the first 10 years of the PPA the solar FiTs will be cut by 30%, but there is a bonus of up to 30% for local content. An additional bonus is available for generating assets that can meet peak demand.
Davies said the main challenges for the market would be around PPA bankability and marketability, availability of finance and certainty of grid connections. “The key challenges in my view are the availability and terms of debt finance and the certainty around grid availability. I think the bankability and marketability of the project documents and programme will get to where they need to be. The key challenge for debt finance is the engagement of the international banking community. There is some traction on this but it may be a while before these banks are able to engage effectively. Regarding grid, SUNA has stated that there is sufficient grid capacity for 5 GW, but developers will require greater visibility and transparency on grid availability.”
“SUNA has stated there is sufficient grid capacity for 5 GW, but developers require greater visibility and transparency on grid availability,” she said.
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