During and in the aftermath of the oil crisis in the seventies, several countries around the world have aimed at reducing their dependency on conventional energy sources such as natural gas, oil or coal. Due to the fast-tracking economic growth in Turkey over the last 15 years, there is an increasing demand for energy in the country. Therefore, high tariff rates are paid by Turkish consumers and unfortunately more than half percentage of consumed energy is imported from neighboring countries to Turkey in order to satisfy the huge demand for energy in the country.
In order to tackle this problem and for environmental issues, the Turkish Parliament passed the “Law Utilization of Renewable Energy sources for the Purpose of Generating Electrical energy”, law number 5346 on 5 May 2005. The main purpose of the law is to increase the utilization of renewable energy sources to generate electric energy and the number of energy sources used in Turkey in order to decrease the dependency on the conventional energy sources. Another goal mentioned in the law is to address the issue of green house emissions in Turkey by using these renewable energy sources.
One important step to achieve this goal has made in June 2013. Turkey´s Energy Market Regulatory Authority (“EPDK”) has given the green light to the distribution of photovoltaic production licenses (also known as “solar energy licenses”) for installations larger than 1 mWh.
According to Article 5 of the Law, this public institution, EPDK, which is already in charge of granting energy generation licenses required for companies to generate electricity from the original source, has also become responsible for the inspections and the monitoring of the renewable projects and granting licenses.
The regulatory change provides energy investors an opportunity to launch solar energy projects larger than 1 mWh such as solar power plants, solar panel facilities, photovoltaic systems and solar thermal power plants (also known as concentrating solar plants).
This is a turning point for the energy industry. For the first time in Turkey, the solar energy can be used for commercial purposes that require large-scale plants, which are larger than 1mWh and not just for domestic and small business uses. In order to make profits in the solar energy sector, it is obvious that companies need to make highly costly investments and bear the maintenance costs of the facilities. For this reason, these investos are now anle to get a license for energy production for the investments, which may produce more than 1mWh energy.
The projects under 1mWh will not be subject to a production license. Solar energy installations under 1mWh are mainly used for domestic and small business uses. This important application of the solar energy has received attention as it is a possible solution for the high electricity tariffs rates paid by consumers.
Not only is the lack of a production license attractive for consumers but also for investors and companies that provide consumers with photovoltaic cells, PV cells converts or batteries. Therefore, consumers will find it easy to buy and install solar energy applications into their houses or business in order to decrease their dependency on electricity and investors will not find administrative obstacles to satisfy the consumers´ demand of these products.
To sum up, these regulatory changes have paved the way for investors and companies’ willing to participate in one of the most emerging fields in the world as the Energy Market Regulatory Authority, EPDK, has started to grant production licenses for projects larger than 1 mWh. Besides, as no production license is required for projects under 1 mWh this facilitates the entry of companies and investors whose businesses aim at satisfying the demand of domestic and small-business.