As anticipated the Renewable Energy Association of Iran (“SUNA”) have published the latest FIT tariffs for any new project as detailed below.

There has been an increase for anaerobic digestion and large decreases for most other technologies and the introduction of additional bandings for solar, thereby favouring smaller sized projects. This is line with SUNA’s announcements that they wished to favour smaller facilities. There is good news as regards the construction periods which have now been adapted for the different technologies. SUNA have also introduced disincentives for applicants in terms of trying to segregate plants to take advantage of the tariff for smaller capacity facilities.  

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Tariff fixed

Once the power purchase agreement is signed the tariff will be fixed subject to the plant being built within the following timelines from the date of signature:

  • 30 months for biomass, geothermal and small hydro
  • 24 months for wind and waste recycling in industrial processes
  • 15 months for solar

Technology coefficient

The above tariffs are applicable for the duration of the power purchase agreement, subject to adjustment for the second 10 years of the power purchase agreement in line with the following coefficient:

  • multiplied by 0.7 (except wind farms)
  • multiplied by 0.4 for wind farms with a power factor >40%
  • multiplied by 1 for wind farms with a power factor of 20% or
  • multiplied by an adequate proportionate coefficient between 0.4 and 1 for wind farms with a power factor between 20-40%

Localisation uplift

The tariff will be subject to an increase (by up 30%) if local equipment, manufacturing, know-how and/or design is used.

Distribution network uplift

Facilities connected to the distribution network will be entitled to a tariff uplift.

Facility aggregation for determining the applicable

For the purposes of calculating the applicable tariff, the capacity of various facilities developed by the same applicant will be aggregated in the following circumstances:

  1. where the facilities are based in the same location or on adjacent plots
  2. the facilities are connected to the same substation or distribution network

An applicant includes its shareholders for such purposes.

State grants

A developer cannot claim a state grant as well as the tariff under a PPA.

Dr. Moshkan Mashkour