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Rooftop solar panels

Rooftop solar panels

Photo by Shutterstock

Rooftop solar panels

Compare IOA
Country
Türkİye
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Renewable Resources and Alternative Energy
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Alternative Energy
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
15% - 20% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
Installed capacity of solar power in the country
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 500,000 - USD 1 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Affordable and Clean Energy (SDG 7)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Climate Action (SDG 13) Decent Work and Economic Growth (SDG 8)

Business Model Description

Investments in rooftop solar energy panels for domestic or commercial use

Expected Impact

This IOA will increase the share of renewable resources in the domestic energy portfolio and contribute to energy security while reducing energy-related CO2 emissions.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.

The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Türkİye
Region
  • Turkey: Southeastern Anatolia Region
  • Turkey: Mediterranean Region
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Renewable Resources and Alternative Energy

Development need
According to the Sustainable Development Report Dashboard 2020, significant challenges remain in Turkey's performance on SDG 7 (Affordable and Clean Energy). Major challenges remain in the country’s performance on SDG 13 (Climate Action); major challenges remain in particular with regards to CO2 emissions from energy and the effective carbon rate.

Policy priority
The 2020 Annual Presidential Program highlights that Turkey is an energy-dependent country with a growing electricity demand. It suggests that the import-dependency should be solved through switching to sustainable alternatives. The 11th Development Plan and the SDG VNR also address this goal of securing a stable supply of energy and reducing carbon emissions

Gender inequalities and marginalization issues
Globally, female employment in the energy sector is around 22%, while the renewable energy sector employs about 32% women. Even within renewables, women’s participation in STEM jobs is far lower than in administrative jobs. (20) In the developing world, 1/7 people lack electricity, especially in rural areas. (21) Providing alternative energy options that are off-the-grid can increase the coverage rate of the rural population and provide cheaper alternatives

Investment opportunities
Turkey ranks 5th in energy consumption in Europe. Yet, the country meets almost 73% of its energy requirements from external sources.Turkey has a great natural potential for solar, wind and geothermal energy. It has a localization objective of obtaining 30% of energy from renewables by 2023. This area is largely privatized & supported by various government incentives (19)

Key bottlenecks
With its growing population and economy, Turkey has an increasing demand on energy. Although succesful incentive mechanisms and regulatory changes have been adopted, they are mostly geared towards large-scale energy projects. Supporting small-scale renewable energy projects and renewable energy cooperatives in a way that is compatible with market conditions is essential.

Sub Sector

Alternative Energy

Development need
Turkey's demand for electricity has been growing at an annual rate of 5%, above the global average of 3% (2). There is a need to increase the share of renewable resources in total electricity production to meet the rising demand sustainably, and utilize domestic production capacities to decrease the dependency on energy imports

Policy priority
Addressing this energy demand through alternative energy production is a goal delineated by the 2020 Annual Presidential Program, the 11th Development Plan and the SDG Voluntary National Review

Gender inequalities and marginalization issues
Globally, female employment in the energy sector is around 22%, while the renewable energy sector employs about 32% women. Even within renewables, women’s participation in STEM jobs is far lower than in administrative jobs. (20) In the developing world, 1/7 people lack electricity, especially in rural areas. (21) Providing alternative energy options that are off-the-grid can increase the coverage rate of the rural population and provide cheaper alternatives

Investment opportunities
Turkey ranks 5th in energy consumption in Europe. Turkey has an average annual solar radiation of 1527 kW·h/(m²·yr).(19) The country can utilize solar energy far above its current usage metrics. Moreover, recent regulatory changes have also paved the way for individual usage by allowing roof-top producers to sell excess energy back to the grid

Key bottlenecks
With its growing population and economy, Turkey has an increasing demand on energy. Although succesful incentive mechanisms and regulatory changes have been adopted, they are mostly geared towards large-scale energy projects. Supporting small-scale renewable energy projects and renewable energy cooperatives in a way that is compatible with market conditions is essential.

Industry

Solar Technology and Project Developers

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Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Rooftop solar panels

Business Model

Investments in rooftop solar energy panels for domestic or commercial use

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Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

Installed capacity of solar power in the country

Turkey had 42 GW of installed renewable power at the end of 2018, and this is set to increase by 50% between 2019 and 2024 to reach around 63 GW by 2024, according to the International Energy Agency (6).

Turkey has 274 rooftop solar energy facilities and 5721 solar farms. It has 6 GW of installed power for rooftop solar facilities and solar farms for self-consumption (7).

Solar energy facilities for commercial use have a total market sizing of 5995 MW in Turkey, 4.6% of this is constituted by rooftop solar energy (7).

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

15% - 20%

Investments in rooftop solar energy systems for self-consumption generate an IRR of 16.41% to 18.12% (7).

Licensed solar energy facilities for commercial use without an incentive scheme or public procurement yield an IRR of 10.5% without energy storage systems.(7)

Licensed solar energy facilities for commercial use obtained through public procurements with applicable incentive schemes have an IRR of 8%. (7)

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

Due to the reduction in installation costs, solar energy production for self-consumption provides financial returns in 4 to 6 years for installations of 500 kW and above, 6-8 years for installations of 10-500 kW, and 7 to 9 years for installations of 0-10 kW (7).

With no public procurement process or incentive, solar energy facilities for commercial use without energy storage systems provide financial returns in 7 years. (7)

The returns for solar energy models obtained through public tenders are accumulated over 9 years. The returns are issued in 9 years for small YEKA tenders. (7)

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 500,000 - USD 1 million

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Not everyone owns their own home (rentals) or has the roof structure viable for the installation of solar panels. The previous ineffective net metering scheme & the restrictions on selling surplus energy to the grid discouraged homeowners from deploying solar panels for domestic consumption.

Market - Volatile

Inadequate incentive schemes, bureaucratic obstacles and the ambiguous legal framework behind the support mechanism (the YEKA mechanism will continue, however, it is not clear what will replace YEKDEM or whether it will be extended) might limit scale over time

Combined factors, as explained in 8.2

The physical application process for a license prolongs the process. An online component should be added. The TEİAŞ transformer station capacity restrictions limit the scale over time
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Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Energy is the main contributor to climate change, it produces around 60 percent of greenhouse gases. (8) Solar energy generates just 20 gCO2e per kWh throughout its life cycle. For this reason, it is one of the energy technologies with the smallest carbon footprint. (9)

Comparing Turkey’s natural annual solar potential with the electricity demand of the country in 2010, the solar energy potential exceeds the electricity demand by a factor of 68. The potential also outweighs the predicted doubling of the electricity demand for the year 2020 by a factor of 31. (10)

Turkey exhibits the fastest growth in electricity demand among OECD members in recent years, growing at an annual rate of 5.5% since 2002. Turkey’s energy use is expected to increase by 50% over the next decade (11)

Gender & Marginalisation

Globally, female employment in the energy sector is around 22%, while the renewable energy sector employs about 32% women. Even within renewables, women’s participation in STEM jobs is far lower than in administrative jobs. (20) In the developing world, 1/7 people lack electricity, especially in rural areas. (21) Providing alternative energy options that are off-the-grid can increase the coverage rate of the rural population and provide cheaper alternatives

Expected Development Outcome

Lower carbon emission levels; solar PV systems used for residential purposes result in 80% lower carbon emissions than fossil fuels and are capable of meeting a household's electricity consumption entirely. (12)

A one point increase in the use of domestic and renewable resources in electricity production contributes approximately 100 million dollars to the domestic economy. (13) For each MW of production, the solar energy sector provides 33 people with employment. (7)

Prevent energy waste; the production of solar energy for self-use at the point of consumption or at a different location in the same distribution zone will prevent the waste of 362.7 GWH per year in the distribution process. (7)

Gender & Marginalisation

Job opportunities exist across the value-chain in renewable energy, investments in this sector are likely to increase female employment if complemented with the right policies

Increase energy access in rural households

Primary SDGs addressed

Affordable and Clean Energy (SDG 7)
7 - Affordable and Clean Energy

7.1.1 Proportion of population with access to electricity

7.1.2 Proportion of population with primary reliance on clean fuels and technology

7.2.1 Renewable energy share in the total final energy consumption

7.3.1 Energy intensity measured in terms of primary energy and GDP

7.b.1 Installed renewable energy-generating capacity in developing countries (in watts per capita)

Current Value

100% (14)(15)

13.37%(14)(15)

0.82kWh/$ (15)

Target Value

100% (14)(15)

100%

Around 51% (dashboard)(14)

The world average is 1.43kWh/$ (tracker)(15)

Secondary SDGs addressed

Climate Action (SDG 13)
13 - Climate Action
Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

Directly impacted stakeholders

People

Households and firms reducing their energy costs through the integration of solar panels, employees in manufacturers and service deliver companies

Gender inequality and/or marginalization

rural population and female led households who lack access to energy

Planet

The domestic and commercial consumption of solar energy will decrease the primary reliance on fossil fuels, reducing CO2 emissions and benefitting the environment

Corporates

Solar panel manufacturers and service delivery companies

Public sector

The Ministry of Energy and Natural Resoruces, Turkish Electricity Transmission Corporation, municipalities and local government officials

Indirectly impacted stakeholders

People

Benefits the general public as it cuts down on carbon emissions and energy import-dependency, generates jobs and income. It may decrease price fluctuations over energy

Gender inequality and/or marginalization

Female population in search of employment

Outcome Risks

The recycling and disposal processes of solar panels can be environmentally hazardous

Impact Risks

Unexpected Impact Risk

Impact Classification

C—Contribute to Solutions

What

Important, positive outcome: increased share of renewable energy resources in electricity generation.

Who

Reducing the dependency on imports benefits the greater economy and creates new jobs.

Risk

Low Risk (The recycling process of solar panels can be environmentally hazardous if not done according to the appropriate standards)

Impact Thesis

This IOA will increase the share of renewable resources in the domestic energy portfolio and contribute to energy security while reducing energy-related CO2 emissions.

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Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

(2020 Annual Presidential Program): The need to increase renewable energy production & reduce energy import dependency is noted by the 2020 Annual Presidential Program, 2014-2023 National Strategy for Regional Development, the 11th Development Program, the Ministry of Energy 2019-2023 Strategic Plan and the VNR Report.

(The Ministry of Energy and Natural Resources 2019-2023 Strategic Plan): The Ministry of Energy and Natural Resources 2019-2023 Strategic Plan aims to increase the share of the installed power from local and renewable energy sources to 65% in total electricity production.

(2014-2023 National Strategy for Regional Development): The need to increase renewable energy production & reduce energy import dependency is noted by the 2020 Annual Presidential Program, 2014-2023 National Strategy for Regional Development, the 11th Development Program, the Ministry of Energy 2019-2023 Strategic Plan and the VNR Report.

Financial Environment

Financial incentives: The Development and Investment Bank of Turkey signed a 15-year 200 million USD loan agreement with the Asian Infrastructure Investment Bank & a 40-year 45 million EUR loan agreement with KfW to finance renewable energy and solar energy production projects. (18)

Fiscal incentives: Facilities generating electricity from renewables benefit from feed-in tariffs for up to 10 years. The feed-in tariff in U.S. Dollars is accepted as the major guarantee that enable banks to supply project finance (17). However, the deadline for YEKDEM is December 31, 2020.

Other incentives: Under Yekdem, additional tariffs are added for the use of local content in RE facilities. The current legislation calls for at least a 55% local content ratio in order to be granted an incentive (17)

Regulatory Environment

(Regulation): Law No.6446, the Electricity Markets Law & Law No. 5346 on the Use of Renewable Energy Resources for Generating Electricity (delineates renewable energy resources, the procedures and principles of their conservation, certification and utilization). Law #6094 amended Law No.5346

(Regulation): For the licensed production of electricity from renewables, the Energy Market Regulatory Authority has the mandate to review and issue licenses. The grid connection permission is determined by the General Directorate of Renewable Energy and Turkish Electricity Transmission Corporation

According to decision #1044 of the presidency, law #5346 has been amended. The changes remove the 13.3$cent/kWh support for unlicensed electricity production (from renewable sources) facilities and replaces it with the possibility to sell excess energy back to the grid(16) (17)

(Regulation): YEKDEM (Renewable Energy Support Mechanism) regulates feed-in tariffs and other such incentive mechanisms for renewable energy

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Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Individual and commercial solar energy investors, domestic and international banks such as Akbank, Denizbank, Garantibank, Isbank, and Vakifbank and Clean Technology Fund (CTF), solar system installers and manufacturers

Government

Ministry of Energy and Natural Resources, Turkish Electricity Transmission Company, Energy Market Regulatory Authority, Enerji Piyasaları İşletme A.Ş (The Energy Markets Management Company, EPIAŞ)

Multilaterals

EBRD, Clean Technology Fund (CTF)

Non-Profit

International Energy Agency, GÜNDER, Energy Exchange Istanbul, Association of Power Exchanges (APEX)

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Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
semi-urban

Turkey: Southeastern Anatolia Region

The Southeastern Anatolian and Mediterranean regions have the highest potential for solar energy based on solar radiation levels (22). The listed regions also demonstrate the highest per capita energy consumption based on TUIK figures (23).
semi-urban

Turkey: Mediterranean Region

The Southeastern Anatolian and Mediterranean regions have the highest potential for solar energy based on solar radiation levels (22). The listed regions also demonstrate the highest per capita energy consumption based on TUIK figures (23).
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References

See what sources were used to establish the investment opportunity’s data and find resources that could be consulted to explore more.
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