With growing demand for electricity, a population in excess of 75 million, good levels of solar irradiation and an established manufacturing sector, Turkey has shown huge PV promise for some years. The revelation that the market has only installed around 60 MW of PV to date has left many in the solar industry disappointed about the markets relative under-performance.
Despite this, many PV module, inverter, manufacturing equipment and component suppliers remain committed to the Turkish market, as evidenced by the strong attendance at the 7th International Solar Energy and Technologies Exhibition (Solarex) currently underway in Istanbul. The first day saw reasonably busy traffic on the exhibition floor and very good attendance from a range of suppliers right across the solar supply chain.
The low cumulative installation figures also belie the fact that administrative hurdles to realizing a solar industry are slowly being removed, and a growing familiarity with solar among bureaucrats and bankers alike is setting the stage for a sustainable market of the future, according to suppliers and developers active in Turkey.
Three months ago Turkish Electricity Generation Transmission Company (TEAS) revealed that only 54.8 MW of PV projects had been connected to the grid in the country, but looking to 2015 installation estimations, there are mixed views.
Some more dovish market participants have reported expectations as low as an additional 40 MW for the remainder of year, while others predict between 150 MW and 200 MW. Uncertain economic performance more generally in Turkey this year, as well as a looming election, has introduced some uncertainty into the market. And with mixed signals coming from the government, the only thing that is clear is that solar is not set to boom overnight.
Growth in unlicensed segment
The unlicensed market segment, for arrays under 1 MW, is showing good signs of growth, with a few caveats. The ability to bundle multiple 1 MW projects is allowing developers opportunities to grow. However, emerging as a bottleneck in the growth of this sector are long-winded permitting processes and a lack of familiarity with solar throughout the banking sector.
While finance is being provided by Turkish banks for unlicensed PV projects, interest rates of around 6% to 7%, for terms of around eight years presents some obstacles. Projects of this size are of little interest to international banks, further aggravating the situation.
The approval process for such projects also remains slow, with a project taking a minimum of nine months to assemble the required approvals before going ahead.
Government tenders for larger projects are also moving ahead, but they too encounter a time-consuming approval process and continue to receive mixed signals from the Energy Ministry.
First Solar reports that it was awarded 19 MW of projects in the first round of Turkeys large scale tenders, and is developing bids for around 300 MW of utility scale PV for round two, which is expected to deliver a total of 600 MW. The licensed sector also faces a hefty and time-consuming approval process with various government agencies.
Evren Evcit, First Solar Power Solutions Turkey Managing Director, told pv magazine that the company, and others, are working with government to deliver a more streamlined approval process and that the familiarity with PV is beginning to grow among energy bureaucrats.
"There is a fast learning curve, but we are only really at the beginning in Turkey," said Evcit.