Five government departments have signed a memorandum of understanding on Monday to build 550,000 small-scale solar generators in rural and across Iran within five years.
According to the plan, each solar station will have the power production capacity of 5 kilowatts and the government guarantees to buy the electricity generated in the solar farms at a fixed price of 22,000 rials ($0.07) per kilowatt hour, the Energy Ministry’s news portal Paven reported.
The scheme will help empower low-income households in poor regions, especially those dependent on government benefits.
The five government departments contributing to the scheme are the Energy Ministry, presidential deputy on rural development, State Welfare Organization, Imam Khomeini Relief Committee and Basij Sazandegi.
According to the program, 110,000 solar power plants will be built in the first year, which will generate permanent jobs and income in underprivileged regions.
Avoiding the use of fossil fuels, helping preserve the environment, saving water consumption, removing deprivation, supporting domestic construction, creating employment and developing clean energy are among the advantages of the program.
Solar radiation in Iran is estimated to be about 1,800 to 2,200 kilowatt-hours per cubic meter annually, which is higher than the global average.
Studies show renewable investments in Iran are profitable. Therefore, the Energy Ministry plans to raise annual renewable energy output to 5,000 MW in four years with the participation of private companies.
There are currently 7,000 solar power stations of different sizes operating in the country. Renewables, including solar and wind sources, account for around 1% of the total electricity generation capacity of more than 85 GW in the country.
The new government scheme to install 550,000 solar arrays in deprived regions is expected to add 2.7 GW of generation capacity to the country’s power mix.
Benefits of Renewables
Renewable energy is the least expensive option for improving access to electricity, reducing air pollution and cutting CO2 emissions. It also contributes to sustainable socioeconomic growth, boosts global gross domestic product growth by 1%, employs close to 29 million people and generates a 15% increase in welfare, mainly through health benefits from reduced air pollution, based on a report by the International Renewable Energy Agency.
According to the Energy Ministry data, solar and wind account for 48% and 36% of the domestic renewable power production respectively.
Small-scale hydroelectric plants, waste-to-energy plants and biomass factories constitute 13%, 2% and 1% of the total renewable output, respectively.
Renewables can help transform unsustainable production and consumption patterns, protect biodiversity, reverse deforestation and combat land degradation.
Investment by private firms in the sector has surpassed $1.1 billion, mostly for solar power production.
To help expand renewable energy in Iran, over $100 million have been earmarked in the budget for the current year.
The development of renewables will help address the problems of generating electricity by thermal power plants.
While thermal power stations require fossil fuel as feedstock and water for cooling purposes and also pollute the environment, renewables are eco-friendly and require neither fuel nor water, nor do they emit greenhouse gas.
The government is encouraging private producers to play a more active role by offering higher prices as an incentive to investors. Tariffs for different types of power stations increased last May and reached 4.4 cents and 4 cents per kWh for photovoltaic power plants and wind farms respectively.
Previously, the Renewable Energy and Energy Efficiency Organization signed agreements to buy green power from private electricity producers based on a model that guaranteed electricity purchase for 20 years, but the model changed last year.
Based on the new model, the main investment and its interest will return to investors within four years, which is equivalent to the purchase of electricity produced in about seven years and subsequently the owners of power plants will deliver electricity to the Iranian market for a period of 20 years.
