Energy Minister Hamid Chitchian on Monday reiterated plans to build five photovoltaic power stations in the near future as part of declared national policy to boost electricity production from renewable sources to 7,500 megawatts by 2030.

Speaking on the sidelines of a ceremony to inaugurate a 1MW solar plant in Arak, the capital of Markazi Province,� Chitchian added that despite the challenges, concerted efforts are being made to construct renewable power plants in different parts of Iran with the help of Niroo Research Institute, ILNA reported.

NRI is a major research organization affiliated to the Ministry of Energy.

The statement echoes Iran's commitment at the Paris Climate Conference last year to curtail� greenhouse gas emissions by increasing power production from renewable sources, such as wind and solar, to 7,500MW by the end of next decade from 240MW at present. In December last year, 195 nations including Iran signed an agreement at the Paris Climate�Conference to shift away from fossil fuels with a goal of limiting a rise in average global temperatures to well below 2 degrees Celsius.

Commenting on hurdles to developing renewable energy, the minister noted, "It is indeed regrettable that such a potentially lucrative industry is among the slowest-growing sectors due to the lack of incentives to encourage private enterprise to invest."

Chitchian says end-users should pay more for the power they now use so that funds could be raised for renewable projects, "otherwise, Iran will continue to lag behind global trends in the power industry, namely in the renewable sector."

Development of renewables is gaining impetus globally, according to the International Energy Agency, as renewables will represent the largest single source of electricity growth over the next five years by rising over 26% by 2020 from 22% in 2013, a remarkable shift in a very limited period of time.

According to Chitchian, some private companies are producing electricity at an estimated cost of 12 cents per kilowatt-hour and sell it at the subsidized rate of roughly 2 cents per kilowatt-hour to subscribers. This further explains the aversion of the private sector to join renewable projects.

Government Pledges

Mohammad Sadeqzadeh, head of the Renewable Energy Organization of Iran, known as SUNA, recently announced that the government pledges to purchase electricity produced via rooftop panels at 8,000 rials (around 22 cents) per kilowatt. The plan is aimed at integrating the electricity output from small photovoltaic panels into the local and national� grids.

According to Sadeqzadeh, utilizing solar panels would be profitable because plants using the technology will be able to sell each kilowatt-hour of their solar power and in exchange use the heavily subsidized electricity at 600 rials, or less than 2 cents.

"People can approach their local electricity offices to install small-scale solar units," the official said without elaboration.

Purchasing the output from solar panels from homes is a positive step to prop up renewable energies, but it is far from enough as most consumers still opt to ignore the benefits of solar energy due to the hassle and financial risk of installing solar panels.

A solar unit for rooftops costs roughly $6,000. The government came up with a plan two years ago to cover 50% of all the costs of panels for privately-owned buildings, but the SUNA official said the plan was scrapped due to regulatory constraints.

By Financial Tribune