Iraq is taking significant steps toward enhancing its solar energy landscape by eliminating customs duties on imported solar energy systems. This move is part of a broader initiative to boost renewable energy adoption and foster private investment in the sector.
Removal of Customs Duties to Encourage Solar Adoption
The Iraqi Council of Ministers has approved the removal of customs duties on solar energy systems, seeking to promote the adoption of solar power across the nation. This decision follows a previous reduction of duties from 33% to just 5% in February 2026. The government is optimistic that reducing costs will encourage more citizens to install solar photovoltaic (PV) systems and attract outside investors. However, the lack of an implementation date leaves some uncertainty regarding when these changes will take effect.
Addressing Rising Electricity Demand and Diversifying Energy Sources
Iraq’s move aligns with efforts to diversify its electricity sources amid increasing demand for energy. The country faces a significant gap between peak electricity demand, which is approximately 50 to 55 gigawatts (GW), and available generation, resting at around 27 to 28 GW. The introduction of solar systems could help alleviate some of this pressure, allowing households to reduce their dependence on diesel generators and enhance energy security during power outages.
In an effort to advance sustainability, Iraq has initiated a program to equip 850 government buildings with solar energy systems over the next six years. This program will see 550 buildings funded by the government and an additional 300 supported by international partnerships. By investing in solar infrastructure, Iraq aims to provide stable energy solutions for public services while simultaneously addressing environmental concerns.
The Role of Solar in Regional Energy Security
The ongoing regional conflicts have disrupted gas supplies, which has fueled a reliance on Iranian gas for nearly 40% of Iraq’s electricity generation. These pressures, coupled with the rising costs associated with traditional energy sources, have catalyzed a shift toward renewable energy. Iraqui imports of Chinese solar panels have surged, jumping from 0.43 GW at the end of 2024 to 1.89 GW by 2025. This trend highlights the growing interest in renewable technologies that promise easier, more cost-effective access to energy.
Furthermore, in March 2026, the Iraqi government announced plans to accelerate solar energy projects as part of an emergency strategy. This move aims to secure electricity supplies and diminish the country’s dependence on imported fuels, particularly in light of increasing regional tensions.
Future Prospects for Solar Energy in Iraq
The Iraqi government has set ambitious goals, aiming to develop a total solar power capacity of 12 GW by 2030. However, as of the end of 2025, solar energy constituted only 64 megawatts of Iraq’s total power mix, according to data from the International Renewable Energy Agency (IRENA). The development of larger solar facilities, such as TotalEnergies’ Basra Solar Power Plant—which is set to become the country’s largest at a total capacity of 1 GW—signals a promising future for solar energy in Iraq.
As Iraq seeks to embrace renewable energy, the moves to reduce customs duties and expedite solar energy projects represent crucial steps toward a more sustainable and secure energy future. With the right investments and strategies in place, Iraq could significantly improve its energy portfolio, benefiting both its economy and its citizens in the long run.