Iran Renewable Energy - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

The iran renewable energy market size is expected to grow from 16.31 gigawatt in 2025 to 18.19 gigawatt in 2026 and is forecast to reach 31.42 gigawatt by 2031 at 11.55% CAGR over 2026-2031. This report is Segmented by Technology (Solar Energy, Wind Energy, Hydropower, Bioenergy, Geothermal, and Ocean Energy) and End-User (Utilities, Commercial and Industrial, and Residential). The Market Sizes and Forecasts are Provided in Terms of Installed Capacity (GW).

Iran Renewable Energy Market Trends and Insights

Government 10-GW Target Catalyzes Regulatory Transformation

A 10-GW headline target to 2025 rewired Iran’s permitting culture, compressing solar approval cycles from years to months and unlocking 29,000 MW of photovoltaic projects in Q1 2025 alone. SATBA now operates a single-window platform that issues grid-connection assurances alongside land-use licenses, slashing legal uncertainty and cutting developer transaction costs. Presidential oversight gives the target political weight that transcends ministerial reshuffles, embedding renewables into national energy-security calculations. The policy tailwind raises execution risk on the grid side, as transmission upgrades must keep pace with the project avalanche; failure to do so could strand roughly one-third of the permitted megawatts by 2027. Nonetheless, the Iranian renewable energy market benefits from the clearest forward visibility it has witnessed in two decades, triggering long-cycle procurement and local-manufacturing investments that were previously untenable.

High Solar and Wind Resource Availability Enables Cost-Competitive Generation

More than 300 sunny days a year and wind corridors recording steady 7 m/s speeds supply natural cost advantages that few peer markets can match. The United Nations pegs the country’s exploitable wind potential near 20 GW, while biomass opportunities sit close to 800 MW, offering diversification beyond headline solar growth. MAPNA’s Mil Nader Wind Farm verified the theoretical upside, posting an 85.49% capacity factor in June 2024, a world record and a practical demonstration that Iranian wind assets can behave like baseload plants. Solar levelized electricity costs already sit within the subsidized fossil-fuel tariff band in Yazd and Kerman, erasing the historical premium that hobbled bankability. Resource concentration, however, imposes a north-south transmission dilemma; wind-rich Sistan-Baluchistan remains distant from Tehran’s load centers, pressing policymakers to prioritize 400-kV backbone expansion. Geothermal prospects surface in West Azarbaijan, where exploratory drilling has confirmed reservoir temperatures above 120 °C, sufficient for binary-cycle power units according to preliminary SATBA data released in 2024 Tehran Times.

Subsidized Fossil-Fuel Tariffs Distort Renewable Economics

Retail electricity averages USD 0.014 per kWh, well below the USD 0.035 cost-recovery point for gas-fired generation, crowding out full-tariff solar PPAs. Treasury models estimate the subsidy drain to be near 11% of fiscal revenue in 2025, yet phased reform remains politically fraught given wage stagnation and inflation above 35%. Industrial power users enjoy deeper discounts, placing utility-scale renewable bids at a structural disadvantage. A draft energy-price reform introduced to parliament in April 2025 proposes tiered tariffs that would lift large-user rates 60% by 2028, a shift that could unlock faster uptake in the Iranian renewable energy market if enacted.

Other drivers and restraints analyzed in the detailed report include:

• Rising Electricity Demand Transforms Energy-Security Calculus
• Climate Diversification Creates Strategic Autonomy Opportunities
• Currency Volatility Inflates Project Capital Expenditures

Segment Analysis

Hydropower supplied 88.65% of Iran's renewable energy market share in 2025, reflecting half a century of dam construction. Yet drought-driven inflow declines and sedimentation now shave annual energy output 12% below nameplate, exposing reliability gaps. In contrast, geothermal is set to grow at a 55.9% CAGR to 2031, leveraging high-enthalpy fields in West Azarbaijan where pilot slim-hole wells logged 120-150 °C gradients. A 5 MW binary-cycle demonstration unit slated for 2026 will test reservoir sustainability under commercial drawdown, and success could unlock a 250 MW provincial build-out by 2030, according to SATBA's feasibility docket. Solar enjoys strong policy momentum: the Iranian renewable energy market size for PV is projected to exceed 7.9 GW by 2031, buoyed by a 600 MW build in 2024 alone and an unprecedented 29 GW permit pipeline. Wind remains the performance standout; Mil Nader's 85.49% capacity factor validates turbine engineering and site selection, positioning onshore fleets as dispatchable complements to midday solar surges. Bioenergy's niche role expanded in April 2024 when a 10 MW waste-to-energy plant entered commercial operation near Tehran, diverting 400 t/day of municipal waste from landfills and advancing circular-economy objectives.

Complementarity emerges as developers co-locate PV arrays at hydropower reservoirs, using daytime solar to conserve water for evening peaking. Aftab-e-Sharq, Iran's largest solar complex, exemplifies scale economics: a 600 MW ultimate build, sponsored by Mobarakeh Steel Company, will feed baseload demand for a captive industrial offtaker, creating a template for vertical integration. Looking ahead, floating PV pilots on hydrodams and hybrid PV-geothermal configurations in Kordestan could diversify resource risk while improving thermal efficiency, accelerating the Iran renewable energy market's migration toward a multi-technology portfolio.

Complete Report Scope:

• By Technology
  • Solar Energy (PV and CSP)
  • Wind Energy (Onshore and Offshore)
  • Hydropower (Small, Large, PSH)
  • Bioenergy
  • Geothermal
  • Ocean Energy (Tidal and Wave)
• By End-User
  • Utilities
  • Commercial and Industrial
  • Residential

List of Companies Covered in this Report:

• Mapna Group
• Noursun Energy Aria
• Ghadir Investment Co.
• Taban Energy
• Farab Co.
• Parsian Energy
• Sunir Co.
• Omran Sahel
• KPV Solar GmbH
• Durion Energy AG
• International Persian Group
• Poyry Plc.
• Vestas Wind Systems A/S
• Siemens Gamesa Renewable Energy
• TotalEnergies SE
• Schneider Electric Iran
• Saba Energy Co.
• Sina Energy Development Co.
• Parhoon Tarh Co.
• Arya Renewable Energy

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support