The Iraqi Customs Authority has reduced customs duties on solar energy systems from 33% to 5% – for PV panels, inverters, cables and lithium batteries – to accelerate solar energy adoption, following financial support from the Central Bank of Iraq.
Iraq’s customs authority has reduced customs duties on solar energy systems from 33% to 5% as part of an effort to encourage greater adoption of solar energy. It said the new tariff cuts will include PV panels as well as cables, inverters and lithium batteries.
The decision to reduce tariffs on solar energy components has already been circulated to all customs centers and is now in effect, according to a report by the state-run Iraqi News Agency.
“A letter was sent to the national team to implement the automation project, specifying the symbol and percentage of the customs drawing of the solar energy supplies, equipment and panels,” Customs Authority Director General Thamer Qassim told the Iraqi News Agency.
This development follows the Iraqi Central Bank’s decision in early February to provide loans worth IQD 6 billion ($4.6 million) for solar energy systems.
Rafal Hussein, director of initiatives at the Central Bank, told the Iraqi News Agency on February 3 that “financing for the purchase of solar panels will remain open until the allocated funds are exhausted, and increased demand for loans is expected in 2026.”
Despite high radiation levels, Iraq does not have a very strong solar energy sector. Cumulative solar capacity was just 42 MW at the end of 2024, according to 2025 data from the International Renewable Energy Agency (IRENA).
Hussein told the Iraqi News Agency that “the low demand for clean energy sources is due to weak awareness and societal culture, and work needs to be done on several fronts to raise public awareness about the importance of the shift to alternative energy sources.”
However, progress is being made slowly. Projects announced in 2025, including the completion of the 22 MW first phase of the Karbala solar power plant in central Iraq in September 2025, could provide a boost. As Iraq’s largest solar power plant to date, Karbala will eventually reach a capacity of 300 MW.
TotalEnergies is also building a 1GW solar project in the south, while UGT Renewables is developing a 3GW solar farm as part of a deal with the federal government, which also includes 500MWh of energy storage.
In May 2025, Iraq inaugurated a 2 MW solar panel in a government building to demonstrate the benefits of renewable energy. The installation was part of the Iraqi public sector’s plan to increase the use of clean energy, with the Prime Minister’s office stating at the time that government institutions and facilities account for almost 30% of Iraq’s total electricity production.
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