“Enabling PV Iran”

Objectives and Study Design

Luz Aguilar BSW Solar Teheran, Dec. 21th, 2015

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Financed by: the German Foreign Office

Timeframe: November- December 2015

Local Support:

Project Partners:

Objectives and Activities

Objective: to contribute to the sustainable deployment of PV in Iran.

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Preparing templates for interviews

Research on legal framework and administrative procedure

Interviews with local stakeholders

Identification of business models and barriers

Consolidation and analysis of information

Analysis of the barriers and the feasibility of business models

selected

Description of business models, barriers and

profitability. Recommendations for next

steps

Presentation of project results at a workshop in Iran

ACTIVITIES AND SCHEDULE

October 2015

November 2015

November 2015

December 2015

Benefits and Outputs

• Transfer of technology and facilitation of business

• Information for investors and project developers who are now

entering the PV sector in Iran based on the business models

• Knowledge exchange with German experts with

understanding of the international solar markets as well as

current trends regarding business models for solar PV

Output:

1. The study Enabling PV

2. Workshop with stakeholders

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Starting Point

In many countries solar energy is cost competitive with many other energy

sources, but potential investors do not know …

• Is it legal to use it?

• Is it profitable?

• What is the right business model to maximize benefits?

– Should I consume and/or sell the electricity?

• Where do I get the components and the know how?

• How / where is financing available?

And what is the situation like in Iran?

What has been reached?

Where are the challenges?

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BSW-Solar - “Enabling PV”

• BSW and GIZ select focus countries with attractive legal or economic

frameworks for new business models

• Projects serve as „Guidance“ for entering the market or project

development

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Brazil (engl.) Jordan (engl.) Tunesia (engl., fr.)

http://www.solarwirtschaft.de/en/international-activities/enabling-pv.html

Is any of the business models applicable in Iran?

Study design:

• Development of guiding questions

• Desk research for analysis on the

– Legal framework and main actors

– Business models applicable

– Business conditions

Interviews with:

– Policy makers at national level

– Project developers

– PV companies

• Involvement of local partners: Iran-Wind Group and Solar Sky for

local research and contact distribution

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Business Model Analysis

General questions on the market:

- Actors, Laws,

- Technologies & System sizes

- Project development process

- Contractual issues

- Grid connection issue

- Certifications and requirements

- Ratability analysis (parameters)

- Sensitivity analysis (parameters)

- Other information

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Results: Profitable Business Models

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Power Purchase Agreements (PPA)

(Basic concept)

- Production of electricity at large scale

- Sale to utility or private off-taker

- Long term contract (>15 years or more)

2 examples for Iran

- Small scale project: 500kWp

- Large scale project: 5MWp

Results: Profitability Analysis of the 2 models

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PV Project PV Business Model

PV System Size kWp 5.000 Feed-in Tariff

Specific System Cost IRR/kWp 50.000.000 Tarif Coeffizient (Year 1-10)

Investment Subsidy IRR - Tarif Coeffizient (Year 10-20)

Total System Cost IRR 250.000.000.000 Exchange Rate

Fixed Operation Costs IRR p.a. 7.700.000.000 Exchange Rate Escalation

Variable Operation Costs IRR/kWh - Inflation Rate

OpEx Escalation Rate % p.a. 10,50% Feed-in Tariff Escalation

PV Generation Results

Specific Yield kWh/qm/a 2000 Net-Present Value

Performance Factor % 80% Project IRR

Specific System Performance kWh/kWp/a 1.600 Equity IRR

Degradation % p.a. 0,70% Payback Period

Project IRR

Project Duration Years 20 Equity IRR

Equity IRR 54.935.683.941 Payback Period

Debt (Gearing) 80% IRR 200.000.000.000 LCOE* (w/o subsidy)

Loan Tenor Years 7 LCOE (w subsidy)

Interest Rate % 4,0% Min DSCR**

Discount Rate % 15,0% Min LLCR***

Investment

Results: Recommendations

- Steps and procedures as given in the legislation

- Information on the procedures based on interviews

and experience (delays, barriers)

- Business conditions in Iran

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Thank you for your attention!

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