







































M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 
12-20 

12 

 

 

 

Review 

Evaluating the impact of economic policies on solar 

energy growth in Iran 
Mahshid Noorollahi1, Shahab Eslami2, Hossein Yousefi2*, Arash Shahee3, Mahmood Abdoos2 

1Faculty of Economics, University of Tehran, Tehran, Iran 
2Energy Modelling and Sustainable Energy System (METSAP) Research Lab, School of Energy and Sustainable Energy 

Resources, College of Interdisciplinary Science and Technologies, University of Tehran, Tehran, Iran 
3School of Energy and Sustainable Energy Resources, College of Interdisciplinary Science and Technologies, University of 

Tehran, Tehran, Iran 

               A R T I C L E   I N F O 
 

Article history: 
Received 15 April 2025  
Received in revised form 
19 May 2025 
Accepted 03 June 2025 
 
Keywords:  
Photovoltaic, Renewable energy,  
Policy instruments,   
Techno-economic assessment,  
Sustainable development 
 
*Corresponding author 
Email address: 
hosseinyousefi@ut.ac.ir 
  
 
DOI: 10.55670/fpll.fusus.3.4.2 
 

A B S T R A C T 
 

This paper explores the techno-economic implications of Iranian policy 

instruments designed to promote large-scale photovoltaic (PV) power plants. 

As global energy demands rise and environmental concerns intensify, 

transitioning from conventional fossil fuels to renewable energy sources has 

become imperative. This study investigates the current state of Iran's electricity 

market and the effectiveness of its power purchase policies in facilitating PV 

development. Despite possessing substantial solar energy potential, Iran faces 

significant challenges, including financial constraints and inconsistent energy 

policies, which hinder the swift adoption of renewable technologies. The 

research utilizes a comprehensive approach to assess these barriers and 

proposes strategic financial solutions to enhance investor confidence and 

participation in the solar energy sector. Notably, this study contributes to the 

existing literature by providing a detailed analysis of Iran's unique socio-

economic context and its impact on the implementation of renewable energy 

policy. The findings underscore the necessity for cohesive governmental 

support and innovative financing mechanisms to unlock Iran's vast solar 

resources, ultimately paving the way for sustainable energy solutions that align 

with global carbon neutrality goals.  

 

1. Introduction 

As energy consumption has risen, humanity has 

encountered a progressive decline in fossil fuel reserves in 

recent years. This has prompted the adoption of alternative 

and sustainable energy sources, such as wind, water, and 

solar power. Simultaneously, the escalating human need for 

energy has resulted in the excessive utilization of fossil fuel 

resources. Consequently, this has led to environmental 

degradation and damaging pollution, imposing substantial 

financial burdens on governments to combat ecological 

contamination. The depletion of fossil fuel reserves served as 

the primary impetus for governments to transition towards 

clean and renewable energy, progressively shifting their focus 

towards natural sources such as wind and solar power. 

Undoubtedly, the sun is universally recognized as the primary 

energy source for humans. Throughout history, humans have 

harnessed their heat and light for various purposes. Even in 

modern times, with cutting-edge technology, it is feasible to 

construct cost-effective solar power plants. Furthermore, it is 

imperative to ensure energy provision without incurring 

exorbitant expenses associated with the extraction and 

utilization of fossil fuels and the emission of detrimental 

gases. In the sun belt, Iran has significant potential for solar 

energy generation. Among these, Qazvin is a prominent 

province in developing and constructing solar power plants. 

Qazvin's favorable conditions for building a power plant and 

installing solar panels stem from its geographical location and 

high elevation, which result in a fall in air temperature at 

higher altitudes. The efficiency of the panels increases. 

However, solar radiation may be a contributing factor. In 

certain regions, the elevated temperature diminishes the 

panels' effectiveness. The expansion of trade and energy use, 

emerging from technological growth and changing lifestyles, 

are the most significant factors in global warming and 

Future Sustainability 

Open Access Journal 

https://doi.org/10.55670/fpll.fusus.3.4.2 

 

 

 

 

 

 

 

November 2025| Volume 03 | Issue 04 | Pages 12-20 

Journal homepage: https://fupubco.com/fusus 

 
ISSN 2995-0473 

mailto:hosseinyousefi@ut.ac.ir
https://doi.org/10.55670/fpll.fusus.3.4.2
https://fupubco.com/fusus


M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

13 

 

environmental changes seen and reported by the researchers 

[1]. New investigations have revealed a higher trend in 

electricity demand due to industrial improvement in 

developing nations. This increasing trend proposes that 

energy consumption in developed nations will be surpassed 

by use in developing countries due to the enhancement of 

socio-economic factors [2,3]. Different methods have been 

developed to harness solar energy, with thermal and 

photovoltaic systems being the predominant ones. Both 

options offer several benefits, including providing pure and 

inexhaustible energy, which is also cost-free. Despite the vast 

potential, this energy usage is significantly limited [4]. The 

Iranian economy relies heavily on petroleum due to its 

abundant fossil fuel sources. The sluggish transition towards 

renewable energy, a key challenge, can be attributed to 

governmental policy and Iran's prevailing social conditions. 

Understanding the role of governmental policy in this 

transition is crucial for informed decision-making. At this 

point, acquiring solar energy is difficult without government 

support and encouragement. The feed-in tariff scheme is the 

most broadly approved policy instrument to promote PV [5]. 

The Iranian government has opted for this strategy to 

enhance the development of renewable energy power 

facilities. Extensive research has identified the optimal hybrid 

systems for residential applications [6].  

Numerous studies have also examined the impact of 

government initiatives on the cost and effectiveness of solar 

energy supply systems and power plants. Notably, a recent 

study outlined a practical and straightforward method for 

effectively controlling the ideal scale of renewable energy 

systems for residential use during the conceptual phase, 

providing reassurance and confidence in its application [7]. 

Public policy substantially influences the progress of 

technologies in the renewable energy industry, mainly 

through tax incentives, production quotas, and tradable 

certificates [8]. Several studies have been conducted in 

developing countries, such as India, to evaluate policy 

instruments and long-term planning for photovoltaic (PV) 

development. The most effective instruments include various 

state policies, such as different Tariff fits [9, 10]. Additionally, 

similar research has been conducted in the US to identify the 

most effective policy solution for rapidly developing 

renewable energy [11].  Due to the different parameters in 

this article, the approach proposed for this optimization was 

based on the RET Screen software. In this paper, this policy 

instrument has been investigated to determine the techno-

economic impact of this policy on a large-scale photovoltaic 

power plant. For a better understanding, the market and 

situation of the electricity market in Iran have been analyzed 

[12]. Despite the significant potential of renewable energy 

sources, Iran continues to rely on fossil fuel resources to meet 

its energy needs. The country has faced significant financial 

difficulties and has generated substantial greenhouse gas 

emissions [13-14]. Moreover, the nation has faced numerous 

challenges in establishing alternative renewable energy 

sources and formulating consistent energy policies in recent 

years. To examine the source of these barriers, this study 

initially provides a comprehensive analysis of previous 

energy policy initiatives in Iran. It demonstrates that 

sufficient commitment to long-term energy planning may 

have significantly mitigated these challenges. Nevertheless, 

past studies have shortcomings in applying individual 

planning tools through technical assessment. 

2. The Islamic Republic of Iran's electricity context 

Despite possessing the world's second-largest oil and gas 

reserves, Iran uses renewable energy resources in its energy 

mix. This decision is based on the following justifications: 

• To conform to global initiatives aimed at mitigating climate 

change and reducing the use of fossil fuels. 

• The objective is to enhance energy availability in remote 

and isolated areas of the country by implementing 

decentralized energy generation. 

• To facilitate the management and mitigation of the 

escalating levels of urban air pollution. 

• To increase the energy security of Iran's energy supply 

through a mix of technologies. 

To sustain and guarantee the current amount of non-

renewable energy exports, as of 2008, approximately 84.5% 

of Iran's electricity was generated by thermal power plants 

that utilized natural gas and heavy fuel oil as their primary 

fuel sources. These power plants had a combined capacity of 

around 53 GW. During the UN Climate Change Conference in 

Paris, Iran committed to reducing its greenhouse gas (GHG) 

emissions by twelve percent by 2030. Iran has experienced a 

recent upswing in its economic growth, expanding by 3% in 

2015. Growth is forecast to increase to 5.8% and 6.7%, 

respectively, in 2016 and 2017. The share of different sources 

of an electric power plant and their situation should be 

specified to investigate the energy policy. In the next part, the 

electricity generation in Iran is briefly discussed [15-17]. 

3. Electricity generation in Iran 

Electricity in Iran is generated by a combination of state-

owned power plants, such as those managed by TAVANIR and 

affiliated Regional Electric companies, hydroelectric power 

plants under the control of the Deputy of Water and Sewage 

of the Ministry of Energy (Moe), privately-owned power 

plants, and the nuclear power plant managed by the Atomic 

Energy Organization. Privatization began with the 

implementation of Energy Conversion Agreements (ECAs). It 

progressed through the establishment of Build-Operate-

Transfer (BOT) and Build Own Operate (BOO) projects in 

collaboration with private investors [18]. In 2013, TAVANIR 

conducted a competitive bidding process and sold a portion 

of its power plants, resulting in a 41% rise in the electricity 

generated from remote locations compared to the total 

installed capacity. This information is supported by the 

studies conducted by Zandi et al. [5], Aryanpur et al. [19], and 

Tabasi et al. [20]. Within every Regional Electric business 

exists a department known as the "Deputy of Power 

Transmission" or "Deputy for Operation." This department is 

responsible for maintaining, operating, and enhancing 

transmission lines and substations. Because TAVANIR owns 

and manages all 16 Regional Electric firms, the transmission 

industry is still regarded as a regulated monopoly [21]. 

Why a large-scale PV power plant in Iran? 

In 2012, Iran initiated its feed-in tariff scheme to 

promote the creation of renewable energy. However, 

according to Bloomberg New Energy Finance, by the end of 

2015, the country had only installed 35 MW of solar 

photovoltaic (PV) and 195 MW of wind energy. In 

collaboration with the Renewable Energy Organization of 



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

14 

 

Iran (SATBA), the government has recently introduced 

guaranteed twenty-year power purchase contracts. These 

contracts provide developers with a fixed and appealing price 

for electricity generated from renewable sources [22]. The 

study "Enabling PV Iran," commissioned by the German 

government and conducted by the German Solar Industry 

Association, emphasizes Iran's favorable solar irradiation and 

significant electricity demand as essential factors indicating 

the considerable growth potential of Iran's solar energy 

sector. This is despite Iran's abundant reserves of 

hydrocarbons [23]. The survey stated that Iran has the 

potential to be one of the most suitable areas for solar energy. 

The country benefits from three hundred sunny days 

annually, covering two-thirds of its area. Given these 

circumstances, the paper proposes that photovoltaic 

electricity generation (solar power) in Iran has the potential 

to increase by double compared to certain established 

European nations [24, 25]. At the beginning of 2016, the 

Iranian Ministry of Energy announced its intention to 

authorize contracts for 1 GW of wind and solar energy 

projects. A key feature of this initiative is the feed-in tariff 

program, which offers substantial benefits to projects 

incorporating domestic content. These projects can 

potentially enjoy a tariff rise of up to 30% under the FIT 

program, a significant boost. Notably, the advantageous tax 

rates associated with this program will remain in effect until 

21 March 2017, providing a clear timeline for stakeholders to 

plan their investments [26]. The PPA proposed under this FIT 

regime will be a 20-year agreement supported by a 

Government Agreement to secure the PPA payment regime. 

The PPA further reduces the Tariffs for all power plants under 

this FIT regime by 30% after the first ten years until the 

conclusion of the contract. The Tariff is also linked to 

fluctuations in the Euro exchange rate against the Rails in 

Table 1. FFT of the solar PV plant is presented [27]. 

Table 1. FiT of solar PV plant in Iran 

Technology Capacity Price  
(IRR per kWh) 

 
 

 
Solar PV 

>30 MW 3200 

10 MW<and ≤30 MW 4000 

100 kW<and ≤10 MW 4900 

20 kW<and ≤10 kW 7000 

≤20 kW 8000 

 

4. Iranian sanctions  

Iran has faced international sanctions for an extended 

period. In 2014, certain restrictions on trade, known as 

sanctions, imposed by the European Union (EU) were 

partially repealed. These sanctions, specified in Regulation 

42/2014, targeted specific sectors such as petrochemicals. 

The US secondary sanctions were suspended as part of the 

Joint Comprehensive Plan of Action, which was agreed to by 

Iran, China, France, Russia, the UK, the USA, and Germany on 

14 July 2015. Additional relaxation of sanctions would be 

provided once the International Atomic Energy Agency 

(IAEA), a trusted international body, confirms that Iran has 

fulfilled its obligations regarding nuclear activities. In January 

2016, following a thorough secondary examination, the IAEA 

declared that Iran had fulfilled its nuclear-related obligations, 

and the EU and US had officially lifted sanctions [3]. EU 

sanctions have, since the announcement, been mostly lifted, 

including the following: 

- The unrestricted movement of funds 

- The restoration of SWIFT services in Iran 

- The majority of individuals and organizations on the list 

were removed, but a few well-known names remain  

- The restrictions on most forms of commerce were 

withdrawn 

The US secondary sanctions were suspended, which included: 

- The US would no longer seek to penalize non-US persons 

and entities who enter business in specific sectors in Iran 

(e.g., oil and gas, automotive, etc.) 

- The US still seeks to prohibit non-US persons and entities 

from entering into business with persons and entities who 

remain on the SDN List (terrorism, human rights abuse, 

WMD, IRGC) 

The critical remaining sanctions are that the US primary 

sanctions remain in place, which implies: 

- Persons and entities subject to US jurisdiction will continue 

to be prohibited from entering into Iran-related 

transactions 

In principle, this would include non-US subsidiaries owned or 

controlled by US persons or entities. Following the lifting of 

EU and US Secondary sanctions, business with Iran for EU 

companies has been largely normalized as of January 2016. 

However, practical difficulties continue to be encountered in 

Iran, primarily due to the ongoing reluctance of international 

banks to re-enter the Iranian market [28]. However, under 

growing pressure from business, some banks are actively 

working on returning to the Iranian market. Recent 

announcements from the Japanese, Italian, and Chinese 

governments have committed them to supporting business 

finance in Iran.  

5. FIPPA and foreign investment protections and 

incentives 

Iran has been trying to attract Foreign Direct Investment 

into the country since the implementation of Sanctions with 

some success. Since the lifting of Primary Sanctions, some of 

the legislation passed has opened the way for Foreign 

Investment with protections, most notably the FIPPA 

Legislation, Iran's Foreign Investment Promotion and 

Protection Act. The Investment Organization administers the 

Act to the Foreign Investment Council. Each company seeking 

its protections must apply for the incentives, and it receives 

such protections through a Permit being issued to the 

company. 

Wishing to Invest in Iran: The following guarantees and 

protections are afforded to companies who make use of the 

FIPPA incentives: 

- Foreign capital is at risk of being nationalized and 

dispossessed. In such situations, the foreign investor will 

be allowed to obtain coverage. 

- If laws or authorities decide to prohibit or temporarily halt 

authorized financial transactions under this Act, the 

authority will assume responsibility for and compensate 

for any resulting damages. 



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

15 

 

- The purchase of assets and producer services in 

international investment is facilitated when a state-run 

entity is the sole client or provider of products or producer 

services at a subsidized price.  

FIPPA further provides the following rights to companies: 

- International investments subject to this Act shall use the 

same protections and tools as possible for national assets 

in a non-discriminatory way. 

- The exterior investment and its interests may be given in 

foreign money or assets. 

- Approval of international investments in all the product, 

manufacturing, farming, transport, information, and 

services areas, as well as in fields linked to water and 

energy. 

- The reference to investment-related discussions in 

international courts. 

- The possibility of land purchase in joint ventures in the 

company's name (registered in Iran). 

- Issuance of permits for three years in Iran for foreign 

investors, directors, specialists, and their direct families, 

and the chance of visa renewals. 

- The investors are informed of the last settlement of their 

applications within 45 days. 

- Having an opportunity to pick the investment process and 

method. 

- Approval of expenditures by any actual or legal non-Iranian 

or Iranian person using the capital of a foreign source and 

investing the equipment envisaged in FIPPA to them. 

The international investor needs to choose an audit institute 

from the audit institutes approved by the Iranian authority. In 

this article, new strategies are reviewed according to the feed-

in tariff policy, which encourages the application of large-

scale photovoltaic power plants in the power sector. These 

policies have not been studied in earlier articles. The 

economic factors, such as the IRR of the assets, the simple, and 

the equity payback, are analyzed together for assessment. In 

this article, a 30 MW PV power plant is investigated. The 

project site is about 220 kilometers from the Iranian Capital, 

Tehran, the country's largest electricity user. The other 

project site is about 55-hectare land at 35th km of the Tehran-

Qom old road after IKIA. Both sites have been simulated in 

PVsyst software, and the economic parameters have been 

analyzed in Ret Screen software. All the results are presented.  

6. Site condition 

In this article, we will examine Qazvin province regarding 

solar energy potential. In terms of days of radiation, this 

province has 280 days of radiation throughout the year, 

which means it has a capacity of 1800 to 1900 kilowatt hours 

of solar energy radiation. In this sense, it is one of the best 

areas to use and benefit from the sun's energy to produce 

electricity. The best place to construct solar power plants in 

Qazvin is the plain land. Although all regions of the province 

are prone to the construction of this type of power plant, in 

terms of cost, the installation of structures and panels will 

naturally be expensive in mountainous areas such as Alamut, 

Lower Tarem, and Auj. At the same time, Qazvin is prone to 

using renewable energies, including solar and wind power, in 

two ways: the location of parts of the province, including 

Siahposh and Kahek, on the way to the wind tunnel, as well as 

the benefit of all its areas in terms of water purity. The 

weather and being above sea level for installing solar panels 

have made the province a special place in this field. However, 

for the construction of wind power plants, particular windy 

areas are considered, to the extent that in Qazvin, only limited 

areas such as Siahposh and Kohek are suitable for doing this 

work, or for the construction of scattered production power 

plants, areas that benefit from gas should be considered. 

Naturally, these power plants cannot be built in any region. 

However, in the solar power plant section, it must be said that 

all parts of this province are prone to benefit from this issue, 

and installing and operating them anywhere is possible. He 

installed solar panels in it. The electricity generated from 

solar power plants can be installed in transmission lines all 

over the province. This problem also increases the efficiency 

of electricity, and at the same time, they can be installed at low 

power, such as 5 or 10 kilowatts. The annual average 

temperature at the site is a low 14.1°C with maximum 

monthly summer temperatures of between 32°C and 36°C 

and average monthly minimum temperatures in Winter of 

below 10°C (Figure 1). 

 
Figure 1. Average annual temperature 

7. Modelling 

The priest software is widely used and continues to be 

developed at the University of Geneva, Switzerland. This 

software designs and simulates solar power plants connected 

to the grid, off-grid, solar pump, and DC microgrid at kilowatt 

and megawatt levels. Overall, this software is a robust and 

comprehensive program with many features.  

7.1 Design of grid systems (Grid Connect) in PVsyst 

software 

With the help of this section, you can design and simulate 

all types of power plants connected to the grid on different 

scales. In Iran, systems connected to the grid have only one 

use: transmitting and injecting all electricity produced by 

solar panels. Meanwhile, in European countries, electricity 

can be fed into the grid simultaneously, and the energy 

created from the panels can be used to supply electricity to 

domestic consumers. PV System software is a well-known and 

leading software in the world. There are no actual high wind 

speeds in the region. However, the wind does blow 

consistently year-round, ranging between 1.0 m/s to 2.0 m/s 

all year round.  The level of direct sunlight is low from 

November to March, where we see only 5–6 hours of direct 

sunlight. In contrast, 9 – 11 hours of direct sunshine are 

experienced in summer. Figure 2 reflects the annual average 

hours of daylight the project site receives.  



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

16 

 

 
Figure 2. Hours of daylight 

The observed irradiation in Qazvin is relatively low in 

Winter but very high in summer, with the annual average 

Global Horizontal Irradiation [kWh/m2] of the area at a 

moderate 1852 kWh/m2. According to Table 2, from the point 

of view of solar energy production in 1852 KW hours per 

square meter, the highest amount is in July and June, which 

has the best efficiency and the most increased production, 

which is 225- and 227-KW hours per square meter, 

respectively, and the lowest The value is for January, which is 

equal to 79 KW hours per square meter. The characteristics 

of PV modules are presented in Table 3. It is a mono-silicon 

panel from the Canadian Solar company. According to Table 

3, the efficiency of this panel is 20.5 to 21.5%.  

This panel type is PERC, its dimensions are 182 x 182 

mm, and its power tolerance is 10 watts. Monocrystalline 

solar panels are made of a single crystal structure, usually 

silicon, which allows for higher efficiency and better low-light 

performance than other solar panels. This makes them 

popular for residential, commercial, and industrial solar 

installations. The design of this panel utilizes advanced solar 

cell technology and PERC (Passively Emitted Rear Cell) 

technology, which helps improve light absorption and energy 

conversion. 

The characteristics of the inverter are presented in Table 

4. To design the inverter for this power plant, we tried to use 

the best inverter available in the market, which is also 

economical. This inverter has characteristics that distinguish 

it from other inverters: its standard PV power is equal to 78 

kW, and the maximum panel power supports up to 113 kW.  

8. Results and discussion 

An actual annual normalized production (per installed kWp) 

pattern for a 30 MW PV power plant in Qazvin is shown in 

Figure 3. Figure 4 is the result of PVSYST software. Qazvin is 

one of the Iranian states with great solar potential, and there 

is a plan to install a 200 MW renewable energy power plant, 

mostly PV and wind. The production of a 30 MW PV power 

plant in Qazvin and its main results are shown in Table 5.  

As shown in Table 5, the annual production of the PV plant is 

about 53497 MWh. Utilizing Table 1 data, economic 

calculations can be made. In this regard, we used RetScreen 

software. The results of the financial analysis are shown in 

Table 6.  

 

Table 2. Monthly solar resource data  

 

Table 3. The characteristics of PV modules 

 

Table 4. The characteristics of the inverter 

 

 

 

 

 

 

 

 

 

 

 

 

Month Gh 

(kWh/m2) 

Dh 

(kWh/m2) 

Bn 

(kWh/m2) 

Ta °C Td 

°C 

FF 

m/s 

Jan 79 34 110 -1 -

5.4 

0.9 

Feb 103 37 131 3.6 -

4.3 

1.6 

Mar 149 58 161 9.1 -

2.9 

1.9 

Apr 171 59 175 13.4 3 1.8 

May 207 70 202 18.3 5.7 1.6 

Jun 227 68 230 23.8 7.5 1.9 

Jul 225 72 221 26.4 9.6 1.9 

Aug 215 61 230 26 8.2 1.7 

Sep 176 45 214 21.9 6.1 1.6 

Oct 133 47 157 16 3.5 1.3 

Nov 94 31 145 8 -

0.2 

1.1 

Dec 74 31 107 2.8 -

2.9 

1.2 

Year 

Total 

1852 613 2083 14.1 2.3 1.5 

Nom Power 305 

Voc 45.2 

Isc 8.84 

Vmpp 36.6 

Minimum MPP Voltage 460 

Maximum MPP Voltage 820 

Frequency 50/60 

Nominal PV Power 78 kW  

Maximum PV Power 113 

kW  

Maximum PV Current 255 A 



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

17 

 

 

Figure 3. The normalized production (per installed kWp) 

The 23 million$ is the initial cost for this project. 23000$ 

is considered for operation and maintenance costs. The 

financial viability is presented in Table 6, which demonstrates 

the application of economic calculations using the software. 

The cumulative cash flow graph in the mentioned situation is 

shown in Table 7. Metrics are used to measure the rate of ROI 

and allow an investor to evaluate and compare investment 

performance. This rate measures a company's profitability; 

the higher the pace of the index, the better the company can 

utilize its capital, and profitability is improved. According to 

the mentioned conditions, the loan capital return period will 

be short, and the IRR for the overall project will be 

approximately 34.8 percent.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 5 illustrates the development of large-scale PV power 

plants across Iranian states. Most of the power plants 

installed after 2016 demonstrate the impact of sanctions on 

the development of renewable energy in Iran. Five provinces, 

Yazd, Hamedan, Kerman, and Fars, hold the largest share. In 

2017, the new fees in the tariff system applied to investors' 

interest in PV power plans increased. 

Table 6. Financial parameters 

 

 

 

 

 

 

Table7. The financial viability of a 30MW PV power plant 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inflation rate % 15.0% 

Project life yr 25 

Debt ratio % 70% 

Debt interest rate % 4.00% 

Debt term yr 10 

Pre-tax IRR - equity % 34.8 

Pre-tax IRR - assets % 20.5 

Simple payback yr 10.6 

Equity payback yr 5 

Pre-tax IRR - equity yr 10 

Table 5. Balances and main results for 30 MW PV, Qazvin 

 
GlobHor T Amb GlobeInc(kWh

/m2) 

GlobeEff(kWh/

m2) 

Earray 

(MWh) 

E_Grid(MWh) EffArrR

% 

EffSysR 

% 

Jan 83.1 0.03 134.3 131.4 3809 3670 15.02 14.47 

Feb 99.6 3.38 142.5 139 3964 3828 14.74 14.23 

Mar 140.9 9.14 171.6 166.9 4565 4405 14.09 13.6 

Apr 169.1 13.11 177.6 171.2 4613 4452 13.76 13.28 

May 205.3 18.27 192.4 185 4879 4711 13.44 12.97 

Jun 221.4 23.33 197 189.2 4879 4651 12.95 15.51 

Jul 220.2 26.41 200.6 192.6 4815 4675 12.79 12.35 

Aug 207.8 25.91 210.5 203.4 4840 4884 12.71 12.29 

Sep 168.9 21.47 196.7 191 5051 4667 13 12.57 

Oct 126.6 16 173.9 169.8 4826 4312 13.6 13.14 

Nov 91.9 7.86 149.3 146.2 40534464 3915 14.39 13.89 

Dec 74.3 2.71 127.7 124.7 3619 3493 15.02 14.49 

Year 1809.1 14.03 2074.2 2010.3 53497 51663 13.67 13.2 

 



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

18 

 

 

 

 

 

 

 

 

 

 

 

 

 
Figure 4. Results obtained by RETScreen software for cash flow 

 

 

Figure 5. PV power plant development by the States in Iran 

9. Conclusions 

The PV power plant project has been sized at 30 MWdc 
to benefit from the favorable tariff for such a project size. We 
have further assumed an annual escalation of 6% each year 
based on the combined Euro to Rial exchange and CPI 
indexation. The PPA also provides a 30% reduction in the 
valid PPA tariff applicable from Year 11 to 20. The results 
show that, although from a technical point of view, Iran has 
excellent potential for a PV power plant, financial problems 
do not allow investors to enter the market quickly. The 
currency exchange rate has recently become the main 
problem; new sanctions pose a higher risk to foreign 
investors. It seems a new policy instrument requires a bank 
guarantee and different insurance policy instruments to 
encourage more investors. The decrease in the costs of 
photovoltaic modules will help the authority to implement 
further investment impulses in this field as electricity costs 
increase and address the fundamental values in Iran. 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

 
 
 
 
 

Ethical issue 
The authors are aware of and comply with best practices in 
publication ethics, specifically with regard to authorship 
(avoidance of guest authorship), dual submission, 
manipulation of figures, competing interests, and compliance 
with policies on research ethics. The authors adhere to 
publication requirements that the submitted work is original 
and has not been published elsewhere. 

Data availability statement 
The manuscript contains all the data. However, more data will 

be available upon request from the corresponding author. 

Conflict of interest 

The authors declare no potential conflict of interest. 

 

 

 



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

19 

 

References 

[1]     Mohammadi, M., Noorollahi, Y., & Mohammadi-

Ivatloo, B. (2018). Demand response participation in 

renewable energy hubs. Operation, planning, and 

analysis of energy storage systems in smart energy 

hubs, 129-161.  

[2]  Eslami, S., Gholami, A., Bakhtiari, A., Zandi, M., & 

Noorollahi, Y. (2019). Experimental investigation of a 

multi-generation energy system for a nearly zero-

energy park: A solution toward sustainable future. 

Energy Conversion and Management, 200, 112107.  

[3]  O’Shaughnessy, E., & Margolis, R. (2018). The value of 

price transparency in residential solar photovoltaic 

markets. Energy Policy, 117, 406-412. 

[4]  Tavana, A., Javid, A. E., Houshfar, E., Andwari, A. M., 

Ashjaee, M., Shoaee, S., Maghmoomi, A., & Marashi, F. 

(2019). Toward renewable and sustainable energies 

perspective in Iran. Renewable energy, 139, 1194-

1216.  

[5]  Zandi, M., Bahrami, M., Eslami, S., Gavagsaz-

Ghoachani, R., Payman, A., Phattanasak, M., Nahid-

Mobarakeh, B., & Pierfederici, S. (2017). Evaluation 

and comparison of economic policies to increase 

distributed generation capacity in the Iranian 

household consumption sector using photovoltaic 

systems and RETScreen software. Renewable energy, 

107, 215-222.  

[6]  Kazem, H. A., Chaichan, M. T., Al-Waeli, A. H., & Sopian, 

K. (2022). Effect of dust and cleaning methods on 

mono and polycrystalline solar photovoltaic 

performance: An indoor experimental study. Solar 

Energy, 236, 626-643.  

[7]  Johnstone, N., Haščič, I., & Popp, D. (2010). Renewable 

energy policies and technological innovation: 

evidence based on patent counts. Environmental and 

resource economics, 45, 133-155.  

[8]  Chen, W., & Wei, P. (2018). Socially optimal 

deployment strategy and incentive policy for solar 

photovoltaic community microgrid: A case of China. 

Energy Policy, 116, 86-94.  

[9]  Ghasemi, G., Noorollahi, Y., Alavi, H., Marzband, M., & 

Shahbazi, M. (2019). Theoretical and technical 

potential evaluation of solar power generation in 

Iran. Renewable energy, 138, 1250-1261.  

[10]  Schmid, G. (2012). The development of renewable 

energy power in India: Which policies have been 

effective? Energy Policy, 45, 317-326.  

[11]  Yin, H., & Powers, N. (2010). Do state renewable 

portfolio standards promote in-state renewable 

generationʔ? Energy Policy, 38(2), 1140-1149.   

[12]  Rezaee, M. J., Yousefi, S., & Hayati, J. (2019). Root 

barriers management in development of renewable 

energy resources in Iran: An interpretative structural 

modeling approach. Energy Policy, 129, 292-306.  

[13]  Nouri, G., Noorollahi, Y., & Yousefi, H. (2019). Solar-

assisted ground source heat pump systems–A review. 

Applied Thermal Engineering, 163, 114351.  

[14]  Olabi, A.-G. (2019). Circular economy and renewable 

energy. In (Vol. 181, pp. 450-454): Elsevier. 

[15]  Awan, A. B. (2019). Optimization and techno-

economic assessment of rooftop photovoltaic system. 

Journal of Renewable and Sustainable Energy, 11(3).  

[16]  Østergaard, P. A., Duic, N., Noorollahi, Y., Mikulcic, H., 

& Kalogirou, S. (2020). Sustainable development 

using renewable energy technology. In (Vol. 146, pp. 

2430-2437): Elsevier. 

[17]  Saidan, M., Albaali, A. G., Alasis, E., & Kaldellis, J. K. 

(2016). Experimental study on the effect of dust 

deposition on solar photovoltaic panels in desert 

environment. Renewable energy, 92, 499-505.  

[18]  Shirzad, M., Panahi, H. K. S., Dashti, B. B., Rajaeifar, M. 

A., Aghbashlo, M., & Tabatabaei, M. (2019). A 

comprehensive review on electricity generation and 

GHG emission reduction potentials through anaerobic 

digestion of agricultural and 

livestock/slaughterhouse wastes in Iran. Renewable 

and Sustainable Energy Reviews, 111, 571-594.  

[19]  Aryanpur, V., Atabaki, M. S., Marzband, M., Siano, P., & 

Ghayoumi, K. (2019). An overview of energy planning 

in Iran and transition pathways towards sustainable 

electricity supply sector. Renewable and Sustainable 

Energy Reviews, 112, 58-74.  

[20]  Tabasi, S., Yousefi, H., Noorollahi, Y., & Aramesh, M. 

(2019). A detailed investigation and performance 

optimization of a photovoltaic panel integrated with a 

reflecting mirror. Applied Thermal Engineering, 160, 

114074.  

[21]  Asrari, A., Ghasemi, A., & Javidi, M. H. (2012). 

Economic evaluation of hybrid renewable energy 

systems for rural electrification in Iran—A case study. 

Renewable and Sustainable Energy Reviews, 16(5), 

3123-3130.  

[22]  Rakhshani, E., Rouzbehi, K., J. Sánchez, A., Tobar, A. C., 

& Pouresmaeil, E. (2019). Integration of large-scale 

PV-based generation into power systems: A survey. 

Energies, 12(8), 1425.  

[23]  Sepehr, M., Eghtedaei, R., Toolabimoghadam, A., 

Noorollahi, Y., & Mohammadi, M. (2018). Modeling 

the electrical energy consumption profile for 

residential buildings in Iran. Sustainable cities and 

society, 41, 481-489.  

[24]  Antonelli, M., Desideri, U., & Franco, A. (2018). Effects 

of large-scale penetration of renewables: The Italian 

case in the years 2008–2015. Renewable and 

Sustainable Energy Reviews, 81, 3090-3100.  

[25]  Honrubia-Escribano, A., Ramirez, F. J., Gómez-Lázaro, 

E., Garcia-Villaverde, P. M., Ruiz-Ortega, M. J., & Parra-

Requena, G. (2018). Influence of solar technology in 

the economic performance of PV power plants in 

Europe. A comprehensive analysis. Renewable and 

Sustainable Energy Reviews, 82, 488-501.  

[26]  Azizkhani, M., Vakili, A., Noorollahi, Y., & Naseri, F. 

(2017). Potential survey of photovoltaic power plants 

using the Analytical Hierarchy Process (AHP) method 

in Iran. Renewable and Sustainable Energy Reviews, 

75, 1198-1206.  

[27]  Noorollahi, Y., Shabbir, M. S., Siddiqi, A. F., Ilyashenko, 

L. K., & Ahmadi, E. (2019). Review of two decade 

geothermal energy development in Iran, benefits, 



M. Noorollahi et al. /Future Sustainability                                                                         November 2025| Volume 03 | Issue 04 | Pages 12-20 

20 

 

challenges, and future policy. Geothermics, 77, 257-

266.  

[28]  Alimohammadlou, M., & Bonyani, A. (2019). Iran's 

energy policy after the nuclear deal for cooperation 

with foreign oil and gas companies. International 

Journal of Procurement Management, 12(2), 199-218.  

 

 

 

 

 

 

 This article is an open-access article 

distributed under the terms and conditions of the Creative 

Commons Attribution (CC BY) license 

(https://creativecommons.org/licenses/by/4.0/). 

 

https://creativecommons.org/licenses/by/4.0/
https://creativecommons.org/licenses/by/4.0/

