Unlicensed PV sector could propel Turkey to 10 GW by 2023

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Turkey could exceed official targets to install 2 GW of solar power capacity in 2023 by as much as 8 GW over the next decade, according to senior energy experts with knowledge of the country’s solar sector.

Deniz Polatkan, senior advisor for Berlin-based cleantech advisory Apricum, and general manager for Turkish PV project investment development company Motif Proje, told pv magazine that he anticipates a "minimum of 10 GW solar PV capacity by 2023", with the industry driven by rapid growth in the country’s unlicensed segment.

Currently, all solar PV projects under 1 MW in size do not need to obtain a license from the Turkish government, and it is this segment of the industry, Polatkan argues, that will enjoy surging growth over the next decade.

"Right now there is a 2 GW project pipeline for unlicensed PV applications, of which at least 1 GW is very serious and backed by German, Chinese, Italian and Turkish investors," Polatkan said.

The bulk of growth in the unlicensed solar segment is generated via 1 MW ground-mounted solar plants developed in the empty heart of the country."This is a flat expanse of Turkey, with few mountains and lots of available, non-agricultural land."

Industrial and commercial-scale rooftop installations are also enjoying solid growth, believes Polatkan. The analyst did remark, however, that the residential market is currently dormant but may show signs of movement towards the end of next year.

A generous feed-in tariff of $0.133 per kWh has made the unlicensed solar segment extremely attractive, and many Turkish investors are happy to hedge their investments against a ROI (return on investment) of 8-9%, whereby typically investors normally seek out returns of 10% +, said Apricum principal Matthias Kittler.

"When the FIT was introduced 2-3 years ago, we were quite disappointed with the rate," Kittler told pv magazine. "It was not attractive back them, but for investors today the price point is OK, even for a duration of ten years. And with the FIT calculated in U.S. dollars, it is particularly attractive since the Turkish Lira has been in a weak position."

Growth in the licensed segment (for solar installations larger than 1 MW) has been stuttering ever since the Turkish government capped its incentive program at 600 MW last year. Applications for licenses for solar farms of between 1 MW to 50 MW reached a total capacity of 8.9 GW, overwhelming the government in the process and setting back development where it was hoped such incentives might instead get the ball rolling.

"There has been just a small amount of the 600 MW processed so far," said Kittler. "We expect between 200 MW to 300 MW to be allocated before the end of 2014." Polatkan added that the government is likely to introduce a cap of 3 GW some time in September, but is unconvinced that this move will prove decisive in kick-starting the licensed solar segment in Turkey.

"I am not currently too hopeful for the licensed segment. I see too many problems caused by difficult legislation and the attitude of the government. There is little support for licensed systems, but the unlicensed sector – where many local people have invested time and money – will be what drives Turkey’s solar market over the next few years."