Iran is fast-tracking solar panel imports to expand its clean energy capacity as it grapples with a growing electricity shortfall, semi-official Mehr News Agency reported on March 13.

Iran has the world’s second-largest natural gas deposits (nearly 34 trillion cubic metres) and is ranked third globally in crude oil reserves (over 206bn barrels). Nevertheless, subsidised energy prices (causing over-consumption), over-reliance on gas and oil,  and a lack of investment (partly due to international sanctions) have led to worsening shortages. The country’s energy deficit deepens during peak seasons, with electricity use breaking records every summer because of air conditioners, and heavy gas consumption in northern cold regions causing a pressure drop in the national distribution network every winter.

President Masoud Pezeshkian said solar panel imports had been officially registered, and efforts to bring them in were “taking shape rapidly.” He added that his government was working to ensure “no issues would arise at Iranian customs” for incoming shipments as has often been the case in previous years due to custom duties.

According to BarghNews, Iran has reached an agreement with China—the country’s sole buyer of crude oil —to channel part of its oil revenues held in the Asian economic powerhouse into financing solar power equipment imports, including panels and inverters. The deal, finalised during Energy Minister Abbas Aliabadi’s visit to China in October, will provide loans to Iranian investors in the renewable energy sector.

During Aliabadi’s trip, the two sides laid the groundwork for the import of equipment to build 3,000 megawatts (MW) of solar power plants in Iran.

In mid-February, Iran’s Plan and Budget Organisation announced that 85% of the costs for imported solar farm equipment would be covered using Iran’s funds in China through an oil-for-equipment barter deal.

The financing is part of a 10-year plan, with IRR550 trillion ($6.11mn) earmarked in the first year for developing solar parks—an initiative allowing private sector participation.

Reiterating the government's push for clean energy, Pezeshkian said on March 13 that state offices and organisations should be fitted with solar panels to meet their power needs. He added that installing solar panels on government buildings and even homes could help ease the country’s electricity grid strain.

The president had already called for installing solar panels in stadiums and school rooftops. Under a government directive, 20% of the electricity needed by state offices must come from renewable sources.

Last summer, Iran faced an average daily electricity deficit of 20,000 MW during peak consumption days, a figure expected to climb to 25,000 MW this summer.

The government hopes to shore up its power supply by adding 10,000 MW to its current daily production capacity of 93,000 MW through renewable energy expansion, efficiency upgrades in existing power stations, and the construction of new thermal power plants (TPPs), which generate over 90% of the country's electricity.

In 2023, Iran’s National Development Fund promised to allocate $5.5bn to green energy development, but the funds have yet to be dished out as loans to investors.

Mohsen Tarztalab, the head of Iran’s Renewable Energy and Electricity Efficiency Organisation (SATBA), announced last week that the Energy Ministry had issued permits to build over 29,000 MW of solar power plants across the country since March 2024.

Renewable energy sources crank out just 1,700 MW per day, which is a tiny fraction of Iran’s overall power generation.