Azerbaijan Solar Report

Discover comprehensive insights into the statistics, market trends, and growth potential surrounding the solar panel manufacturing industry in Azerbaijan

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  13. Solarstorageextra, d., (June 2024), Masdar breaks ground on solar farms in Azerbaijan, Retrieved on 22 November 2024 from https://solarstoragextra.com/masdar-breaks-ground-on-solar-farms-in-azerbaijan/.
  14. PV Magazine, d., (November 2024). Azerbaijan awards 100 MW of solar with lowest bid of $0.0354/kWh, Retrieved on November 22 2024 from https://www.pv-magazine.com/2024/11/21/azerbaijan-awards-100-mw-of-solar-with-lowest-bid-of-0-0354-kwh/
  15. Worldsalaries, d., (2024),Average Solar Energy Systems Engineer Salary in Azerbaijan, Retrieved on 19 November 2024 from https://worldsalaries.com/average-solar-energy-systems-engineer-salary-in-azerbaijan/.
  16. World salaries, d., (2024),Average Solar Thermal Technician Salary in Azerbaijan, Retrieved on 19 November 2024 from https://worldsalaries.com/average-solar-thermal-technician-salary-in-azerbaijan/.
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  26. ADB , d., (November 2024), ADB, Masdar Sign $160 Million Deal to Build two of the Largest Solar Power Plants in Azerbaijan, Retrieved on 22 November 2024 from https://www.adb.org/news/adb-masdar-sign-deal-build-two-largest-solar-power-plants-azerbaijan.
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Key points

  • All figures have been converted into USD

Yearly sunshine (sun hours per year)

Sunshine Duration: 1

Azerbaijan has a highly diverse climate, encompassing nine recognized climate zones. Average yearly sunshine hours in Azerbaijan are estimated to be 2350 hours. In different regions of Azerbaijan, Sunshine hours are as follows:

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Regions Annual Sunshine Hours
Kur-Araz Lowland, Apsheron Peninsula, and other plains and foothills 2,200-2,400
Plains around the Araz River in Nakhchivan 2,600-2,800
Mountainous Regions 1,900-2,200

Direct Normal Irradiation (DNI): The average yearly Direct Normal Irradiation in Azerbaijan is approximately 1387.43 kWh/m², indicating the solar energy available for concentrating solar power systems. 2

Global Horizontal Irradiation (GHI): Azerbaijan’s average yearly Global Horizontal Irradiation is around 1533.6 kWh/m², highlighting a strong potential for solar energy generation on flat surfaces and for general photovoltaic installations. 2

kWh per kWp installed

The average yearly Photovoltaic Power Potential across Azerbaijan is about 1387.4 kWh/kWp.2

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Average cost per kWh from utility company

In March 2024, the residential electricity price in Azerbaijan was USD 0.047 per kWh and for businesses, it was  USD 0.065 per kWh. 3

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Reliability of electrical power supply grid

Azerbaijan has provided electricity to 100% of its population since 2013.4

From 2015 to 2019, transmission losses fell from 2.1% to 1.5%, and distribution losses fell from 9.6% to 7.5%. 5

In 2019, the Azerbaijan System’s Average Interruption Frequency Index (SAIFI) was 0.96 interruptions per customer.6

In the same year, the System Average Interruption Duration Index (SAIDI) was 0.86 minutes on average for each customer.7

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Detailed Information

  • All figures have been converted into USD

    • Total solar panel production capacity (installed)

    The International Renewable Energy Agency (IRENA) estimated that the total installed Solar Panel Production Capacity in Azerbaijan was 281 MW in 2023.8

    In October 2023, Azerbaijan inaugurated the 230 MW Garadagh Solar PV Plant, marking a significant milestone in renewable energy development.9

    Total solar panel production capacity (projected)

    According to IRENA’s assessment, Azerbaijan possesses a remarkable solar potential of 23,000 MW.10

    Average costs of various electricity generation sources (coal, natural gas, solar, etc)

    The levelized cost of electricity (LCOE) for each technology in 2020 was as follows:10

    • Solar PV: 0.057 USD/kWh
    • Onshore Wind: 0.039 USD/kWh
    • Offshore Wind: 0.084 USD/kWh

    Percentages of various electricity generation sources (coal, natural gas, solar, etc)

    Azerbaijan’s electric power system has achieved significant advancements, with a total installed capacity of 8320.8 MW. Thermal power plants dominate, producing 6633 MW (79.72%), followed by hydropower at 1301.8 MW (15.65%). Solar energy contributes 281.8 MW (3.39%), wind adds 66.5 MW (0.80%), bioenergy provides 37 MW (0.44%), and hybrid plants offer 0.7 MW (0.01%). This diversified energy mix strengthens Azerbaijan’s grid resilience while supporting a gradual shift towards renewable energy sources.11

    Source Total Capacity (MW) Percentage (%)
    Thermal Power Plants 6633 79.72
    Hydro Power Plants 1301.8 15.65
    Wind Power Plants 66.5 0.8
    Solar Power Plants 281.8 3.39
    Bioenergy Power Plant 37 0.44
    Hybrid Power Plants 0.7 0.01
    Total Installed Capacity 8320.8 100

    Projected Renewable Energy:

    According to Mordor Intelligence, the renewable energy market in Azerbaijan is expected to expand from 8.17 GW in 2024 to 9.66 GW by 2029, with a compound annual growth rate of 3.40%.12
    Azerbaijan is committed to transitioning to green energy by increasing renewable energy capacity to 30% by 2030 and reducing greenhouse gas emissions by 40% by 2050. 9

    Average daily availability of electricity from the national grid (measured in hours)

    The System Average Interruption Duration Index (SAIDI) was 0.86 minutes on average for each customer. This means each customer experienced 0.86 minutes (or about 52 seconds) of power outage during the year 2019. 7

    Number of residential solar panel installations

    This data is not publicly available.

    Total number of solar farms (installed and projected)

    Installed: According to official documents of Azerbaijan, 13 solar power plants are operational in Azerbaijan. 11

    Projected: 2 Solar farms are under construction by a company MASDAR and a contract of 1 solar farm was recently awarded to China at the lowest bid of  $0.0354/kWh.1314

    Off-grid market demand for solar panels (current and projected)

    According to the International Renewable Energy Agency (IRENA), the off-grid Solar Panel Production Capacity in Azerbaijan was 0 MW in 2023.8

    On-grid market demand for solar panels (current and projected)

    The International Renewable Energy Agency (IRENA) estimated that the total On-Grid solar Capacity installed in Azerbaijan was 281 MW in 2023.8

    Projected:

    The construction of two new solar farms, with a combined capacity of 760 MW, will increase Total’s on-grid solar production to 1041 MW.13

    Average monthly income of workers in solar industry (labor cost)

    • The Average salary of a solar engineer in Azerbaijan is 1680 USD per month. 15
    • The Average salary of a Solar Thermal Technician in Azerbaijan is 955 USD per month. 16

    Population of the country

    As of Saturday, November 16, 2024, Azerbaijan’s population is 10,359,791. 17

    Average overhead costs of solar panel production (with a brief breakdown)

    Estimate for Factory Rent: Average warehouse rent in the capital of Azerbaijan is $5-$10 per square meter per month and for industrial land, the price is extremely high starting from $50 per square meter per month. 18

    Industrial Electricity Rates: 0.059 USD/kWh.19

    Water Costs: 0.007 USD/m3. 20

    Key Components of Administrative Costs

    Salaries and Wages:

    • The Average salary of a solar engineer in Azerbaijan is 1680 USD per month. 15
    • The Average salary of a Solar Thermal Technician in Azerbaijan is 955 USD per month. 16

    Rent for Office Space: Average office Space rent in the capital of Azerbaijan is $40-$60 per square meter per month.  18

    Insurance:  In 2024, the average spending per capita in Azerbaijan’s property insurance market was  39.20 USD.21

    A summary of the energy infrastructure

    • Total installed electricity generation capacity:8 MW 11
    • Total generation:30 TWh. 4
    • Per capita generation: 2814 kWh. 4

    Generation mix:

    Azerbaijan’s energy production is diversified, led by fuel-based electricity and CHP plants, which generate 25,237.9 GWh annually. Hydropower adds 1,763.4 GWh, while fuel-powered avtoproducers contribute 1,945.5 GWh. Renewable sources, including wind and solar power, produce 55.4 GWh and 80.7 GWh, respectively. Additionally, 223 GWh is generated from waste incineration, strengthening Azerbaijan’s power system with a mix of conventional and renewable sources. 22

    Source Production GWh
    Electricity and  CHP plants working with fuel 25237.9
    Hydro-electric power station 1763.4
    Avtoproducers (working with  fuel) 1945.5
    Wind power  station 55.4
    Solar  power  station 80.7
    Electricity generated from wastes incineration 223

    Leading players: 1223

    • Azerenerji is the state electricity company that generates and transmits electricity.
    • Azerishig JSC is a state-owned electricity company that distributes and supplies electricity.
    • Other key players in Azerbaijan’s renewable energy sector include: Abu Dhabi Future Energy Company PJSC (Masdar), ACWA Power International, Tamiz Shahar JSC, and OCA Global Investments

    Transmission & Distribution 5

    Infrastructure

    High-Voltage Network: Azerbaijan’s high-voltage transmission network spans approximately 7,800 kilometers, comprising:

    • 1,505 km at 220 kV
    • 31 km at 230 kV
    • 1,542 km at 330 kV
    • 477 km at 500 kV

    This network includes 93 high-voltage substations that facilitate the distribution of electricity across the country.

    Cross-Border Connections: 5

    Azerbaijan has cross-border connections with the following countries:

    • Georgia: Two cross-border connections, the 500 kV Samukh-Gardabani line and the 330 kV Agstafa-Gardabani line.
    • Iran: Five cross-border connections, the 330 kV Mugan, 230 kV Imishli, 110 kV Astara-Astara, 132 kV Araz-Araz, and 132 kV Julfa-Julfa lines.
    • Turkey: Three cross-border connections, the 154 kV Igdir-Nakhchivan 1, the 154 kV Igdir-Nakhchivan 2, and the 34.5 kV Sadarak lines.

    Major power plants: 11

    Azerbaijan’s energy landscape is characterized by a mix of thermal, hydroelectric, and renewable energy plants.

    Here are some of the most significant power plants in the country:

    Thermal Power Plants: 1024

    Some important thermal power plants operating in Azerbaijan are the following:

    Thermal Power Plants Capacity (MW)
    Azerbaijan TPP 2400
    Shirvan 1050
    Janub PP 780
    Sumgait PP 525
    Shimal 1 and 2 PPs 800
    Sangachal PP 300
    Baku TEC 107
    Baku PP 105
    Shadagh PP 105
    Astara PP 87

    Renewable Energy sources

    • Wind energy: 11

    The top 5 wind power plants as per production capacity are as follows:

    Wind Energy Power Plants Installed Capacity (MW)
    Yeni Yashma WPP 50
    Hokmeli WPP (Alten Group) 8
    Gobustan WPP (Hybrid) 2.7
    Yashma Baglari WPP 3.6
    Shurabad WPP 1.7

    The top 5 hydropower plants operating in Azerbaijan are as follows:

    Hydro Power Plant Capacity (MW)
    Mingachevir HPP 402
    Shamkir HPP 380
    Yenikend HPP 150
    Fuzuli HPP 25
    Sangaçhal HPP 25
    Takhtakorpu HPP 25

    Some small hydropower plants operating in Azerbaijan are as follows:10

    Hydro Power Plant Capacity (MW)
    Gulabird SHPP 7.5
    Oghuz SHPP 1, 2 & 3 6.3
    Vaykhur SHPP 5
    Goychay SHPP 3.1
    Ismayilli-1 SHPP 1.6
    Ismayilli-2 SHPP 1.6
    Balaken-1 SHPP 1.5
    Gusar SHPP 1

    Some of the government regulations surrounding solar panel production

    The major solar projects in Azerbaijan, such as the 230 MW Solar PV Plant by Masdar, adhere to international quality standards: 25

    • ISO 9001 (Quality Management)
    • ISO 14001 (Environmental Management),
    • OHSAS 18001 (Occupational Health and Safety)
    • ISO 17025 (General requirements for the competence of testing and calibration laboratories)

    Government initiatives in solar panel production (includes investments and subsidies)

    Investments: Azerbaijan is building two solar farms of 760 MW capacity with an investment of 160 Million USD from the Asian Development Bank.26

    Tax and Duty-Free Advantages: Azerbaijan’s Cabinet has approved customs duty exemptions for equipment related to renewable energy development, effective June 1, 2024, for three years. This initiative aims to promote investment in the country’s renewable energy sector.27

    Guarantees for investors in Renewable Energy: Investors are granted a seven-year Investment Promotion Certificate, providing 50% reductions in income and profit taxes, along with exemptions from VAT, customs duties on imported machinery, and waivers for property and land taxes, fostering a favorable investment environment.28

    Notable solar projects in the country (installed and projected)

    Installed:

    The top 10 Solar power plants operating in Azerbaijan as per production capacity  are the following:11

    Solar Power Plant Installed Capacity (MW)
    Gardagh SPP 230
    Nakhchivan SPP 22
    Sharur SPP 11
    Kangarli SPP 5
    Gobustan PP (Hybrid) 3
    Samukh SPP 3
    Sumgayit SPP 2
    Sahil SPP 2
    Surakhani SPP 2
    Pirallahi SPP 1.1

    Floating Solar Power Plant on Lake Boyukshor

    Azerbaijan also has a floating solar power plant on Lake Boyukshor.29

    • Location: Lake Boyukshor, near Baku, Azerbaijan.
    • Capacity: 100 kilowatts (kW) total capacity (95 kW from floating solar panels and 5 kW from land-based panels).
    • Annual Energy Generation: Over 160,000 kilowatt-hours (kWh) of electricity.

    Projected Solar Projects: 30

    In June 2024, Azerbaijan approved the construction of two new solar plants totaling 760 MW.

    • 445 MW Bilasuvar Solar PV Project
    • 315 MW Neftchala Solar PV Project,

    Both Solar Farms will be developed by Masdar in partnership with SOCAR (State Oil Company of Azerbaijan). These projects are expected to be operational by 2027.

    Some of the notable solar companies (plus brief details on what they do)

    Masdar: Masdar is a UAE-based company that has successfully developed the Garadagh Solar Power Plant, which boasts a capacity of 230 megawatts in Azerbaijan. MASDAR has also partnered with SOCAR to develop a 760MW solar PV project in Azerbaijan, consisting of two plants in Bilasuvar and Neftchala.

    Website: https://masdar.ae/en/global-office-locations/Azerbaijan

    Provitaz: Provitaz is an Azerbaijani company that offers a range of solar energy solutions, including turn-key power plants, solar pumping, and solar thermal installations. According to the company’s website, Provitaz provides customized solar solutions that cater to its clients’ unique energy needs.

    Website: https://provitaz.com/

    Helind Enerji Helind Enerji is a Turkish company with operations in Azerbaijan, offering solar energy solutions for residential, commercial, and industrial customers. The company’s website states that it provides end-to-end services, including initial consultation, system design, installation, and after-sales support.

    Website: https://www.helind.com/en/projects

    Green Life Energy: GLE is a solar energy company based in Azerbaijan that offers a range of solar energy solutions, including solar panel installation, solar water heating, and solar pumping systems. According to the company’s website, GLE aims to provide high-quality solar energy solutions to its customers while reducing their dependence on traditional energy sources.

    Website: https://greenlifeeng.com/

    SWTech: SWTech is an Azerbaijani company that offers a range of solar energy and wind energy solutions, including solar panel installation, solar water heating, and solar pumping systems. The company’s website states that it provides high-quality solar panels and energy-efficient solutions to its customers.

    Website: https://swtech.az/

    USEC USEC is an Azerbaijani company that offers a range of solar energy solutions, including solar panel installation, solar water heating, and solar pumping systems. The company’s website states that it provides high-quality solar energy solutions that reduce its clients’ dependence on traditional energy sources

    Website: https://usec.az/

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