For years, Iraq has been famous as a rich nation of oil. However, below its unstoppable desert sun, there is another resource that can be even more helpful than the oil – solar energy. The country faces chronic electricity shortages, high summer temperatures, and a vulnerable energy supply, so alternative energies are possible - and Iraq has one of the most favorable conditions for it.
A Natural Advantage: World-Class Solar Radiation
Iraq belongs to the worldwide solar belt, indicating it gets a high amount of solar energy, making it a suitable country for implementing solar power projects. As per a research conducted by Baghdad University, the solar electricity generation should cost approximately 45 Iraqi dinars for manufacturing one kilowatt of electricity, thus confirming the feasibility of the idea of using solar energy.
Other academic studies that support this outlook were published in an AIP Conference Proceedings review published in February 2026. The review points to "the many benefits of moving to solar and wind energy: lower greenhouse gas emissions, increased security of energy supply, higher agricultural productivity, and better social development." According to the study, renewable energy will allow Iraq to make its energy mix more diversified and improve its sustainability in general.
A Crisis That Demands Action
Despite its oil and gas wealth, Iraq has long suffered from a crippling electricity deficit. The country currently generates between 24,600 and 29,000 megawatts of power, but peak summer demand reaches 55,000 to 60,000 megawatts - leaving a staggering shortfall of approximately 27,000 to 42,000 megawatts. Even under the best circumstances, the national grid supplies private households with only eight to 12 hours of electricity per day. Ordinary Iraqis are forced to pay between $100 and $300 monthly to private generator operators just to keep the lights on.
The situation is compounded by Iraq's heavy reliance on Iranian gas, which supplies up to 40% of the fuel needed for its power stations. When Iran completely cut gas supplies in March 2026 following an Israeli attack on its gas fields, Baghdad experienced days of total blackouts. "After that, a lot of our neighbors were also talking about this [solar]. Everybody is really starting to think about it seriously," a Baghdad resident told DW.
Government Action: Tariff Cuts and Financing
Recognizing both the urgency and the opportunity, the Iraqi government has rolled out a series of policy measures to accelerate solar adoption. In early 2026, the Iraqi Customs Authority slashed import duties on solar energy systems - covering photovoltaic panels, inverters, cables, and lithium batteries - from 33% to 5%. The move was designed to lower costs and encourage wider adoption.
At the same time, the Central Bank of Iraq launched a solar energy financing initiative offering loans at interest rates capped at just 2.5% - well below the monetary policy rate of 5.5%. The bank allocated a total of 6 trillion Iraqi dinars to banks for solar energy loans, with financing remaining open until allocated funds are exhausted. While uptake has been modest so far - with approximately 6 billion dinars in loans issued as of early 2026- officials expect demand to surge as public awareness grows.
Flagship Projects Taking Shape
Iraq has aspirations for solar energy and they are working on the implementation progress. The first unit of the solar project named Al-Ratawi 1GW solar plant, the first large solar energy plant in Iraq, started operating in March 2026 after fulfilling connection with the national electricity network. Located in Basra province, the project comprises 4 phases of 250 MW and operates with 2 million solar panels placed on an area of 9 square kilometers in the desert. When completed, the station is expected to produce annual 2,900 GWh of clean energy enough for 350,000 families and reducing some 2,385 tons of carbon dioxide emissions. The company developing the project is one of the joint ventures of Energy China International, Tianjin Electric Power Construction Company and Southwest Electric Power Design Institute.
The Basra solar project in Basra province commenced its operations. The first unit has already been operational since March 2026 with a capacity of 250 MW. The project's second unit with equal capacity of 250 MW is expected to be operational in the third quarter of 2026, completing a total of 500 MW of power generation. The project is a 1.2 GW project executed under the management of QatarEnergy and TotalEnergies.
Outside Basra, Iraq has given the green light for the development of over 120 different solar energy plants across different provinces such as Babil, Karbala, Kirkuk, Baghdad, Dhi Qar, Maysan, and Nineveh. The overall 2030 Renewable Energy Plan of the country has set a goal of 12.5 GW as the total capacity of solar energy generated.
A Milestone: Domestic Manufacturing Takes Root
Perhaps the most symbolic breakthrough came in June 2026, when Iraq commissioned its first-ever domestic solar panel manufacturing facility. Named "Al-Noor" (meaning "light"), the factory is located in Karbala province and was developed by the Abbas Holy Shrine with full Iraqi ownership. The facility has an initial annual production capacity of 100 MW, with plans for future expansion. It is equipped with fully automated Italian production lines and produces M10-144 cell TOPCon half-cut modules that meet international quality standards.
Before Al-Noor, Iraq relied on 100% imports for all photovoltaic equipment, which kept project costs high. The new factory directly creates more than 300 stable manufacturing jobs and is cultivating a domestic workforce in PV production, quality control, and maintenance. As one industry observer noted, the plant marks the transition of Iraq's solar industry from "a purely application-based country" to one that is beginning to build its own manufacturing base.
Solar Goes Mainstream
The movement towards solar energy is also being seen on a grassroots scale. Farmers in the agricultural fields of Muthanna province in southern Iraq have been using solar-powered irrigation system as well. According to a farmer named Finjan Ahmed, "My land now uses only solar panels imported from China to power the irrigation water pumps and at the same time lower my costs of production."
Demand for solar systems is rising sharply across the country. According to Basim Ahmed, manager of a local solar energy supply company, his firm's imports of photovoltaic equipment from China increased by about 30% year-on-year in 2026. "Chinese manufacturers have extensive experience in the photovoltaic sector, and Chinese technology and products have become the mainstream choice in the Iraqi market due to their high efficiency and cost-effectiveness," he said.
The government is leading by example as well. Approximately 250 government buildings across Iraq are now equipped with photovoltaic systems. As of July 2026, 209 schools and seven comprehensive healthcare centers had been brought online with solar power across various provinces. More than 150 additional government buildings are undergoing active installation, including high-priority sites such as the General Secretariat of the Council of Ministers and the Ministry of Water Resources.
The Road Ahead
Iraq's solar momentum is unmistakable. The country has the natural resources, the policy framework, the flagship projects, and the grassroots demand to drive a genuine energy transition. As Nasser Karim, head of Iraq's national team for renewable energy projects, told People's Daily: "Renewable energy solutions are attracting more and more attention, from ordinary households to government agencies. We welcome more companies to participate in cooperation, and the Iraqi government will provide more facilitation."
In a nation long defined by its oil reserves, the sun is emerging as a powerful new source of energy - and hope. With peak summer demand projected to reach 60,000 megawatts and the grid struggling to keep pace, solar power is no longer a luxury for Iraq. It is a necessity. And for a country blessed with some of the world's most abundant sunshine, the path forward is as clear as the desert sky.
