The Majlis has passed a law stating that 25% of the value added tax on the electricity bills should go for promoting the Renewable Energy and Energy Efficiency Organization (Satba), director general of parliamentary affairs of the Energy Ministry said.
“It is allocated to Satba to guarantee the purchase of power from non-state renewable electricity producers, especially those in deprived and rural areas,” IRNA quoted Davoud Kamkar as saying.
Revenue for Satba from implementation of the new VAT law by the end of the current year (March 2021) is estimated at $25 million, he added.
Iran is largely dependent on thermal power but is gradually moving towards renewables to help protect the environment and do its share in fighting global warming.
A major incentive in this regard has been a government scheme that guarantees the purchase of green power for 20 years.
The guaranteed purchase price paid by the government for renewable power generated by private companies has, on average, increased by 65%.
Paying More
The big increase in tariffs is for small-scale solar farms. Accordingly, the rate of electricity purchase from rooftop solar units is the highest to encourage households to install solar panels.
Expanding solar farms and rooftop photovoltaic power stations will help create jobs, especially in rural areas. Solar energy can be used for heating, cooking and lighting without the need for extensive gas transmission networks and high fossil fuel consumption.
With the new law, the government will be able to encourage private companies to invest more in renewables because such firms played an important role in the expansion of green energy in the recent past.
Private companies have put more than $1 billion in the gradually expanding renewable sector, mainly solar and wind energy.
There are more than 115 large solar farms in Iran, and 3,560 smaller installations in cities and rural areas.
Over 2,500 rooftop photovoltaic power units will be set up by the end of the year mainly in deprived regions.
In addition to boosting electricity production, construction of clean energy power plants will also help improve the livelihoods of needy households.
Iran has a diverse climate of vast windy lands and more than 300 sunny days a year, which makes it ideal to tap into wind and solar power.
More than 80% of electricity demand is met by thermal power plants that run on fossil fuels. Of the total 84,000 megawatt capacity, less than 1,000 MW is from renewables.
According to Energy Minister data, green energy figures show 44% is from solar, 40% wind power, 13% small hydroelectric plants, 2% geothermal and 1% biomass.
