Turkey's Renewable Energy Support Framework
Most people think getting into renewable energy in Turkey means jumping through endless bureaucratic hoops and competing with massive corporations. That's only half the story.
While everyone talks about Turkey's ambitious renewable targets, they're missing the hidden opportunities built right into the law. You can actually:
Generate solar power for your home or business without a production license
Sell excess energy back to the grid at guaranteed rates
Earn premium payments for using Turkish-made equipment
The government has created multiple income streams and legal protections that most property owners and small businesses don't even know exist. We're about to walk through the specific legal mechanisms, payment structures, and little-known provisions that could turn your roof into a revenue generator while cutting your energy bills.
Feed-in Tariff Pricing Structure
Fixed Price Guarantees for Producers
Turkey offers reliable income streams for renewable energy producers through fixed price guarantees established in Article 6. The law guarantees specific purchase prices for different renewable energy types:
7.3 US cents/kWh for hydroelectric and wind
13.3 US cents/kWh for solar and biomass
This pricing structure gives investors confidence in long-term revenue projections, making renewable projects more bankable and attractive.
Ten-Year Support Timeline
When you invest in renewables in Turkey, you're entitled to guaranteed prices for a decade. Article 6 specifically provides this 10-year stability window from the date your facility begins operation.
This decade-long security significantly reduces market risks that often deter renewable investments. Think of it as having a safety net while the broader renewable energy market and technologies mature.
Currency Options and Adjustments
For facilities entering operation after June 30, 2021, Article 6 specifies that prices will be determined in Turkish lirarather than US dollars. The President has authority to set details on how these prices will be calculated and updated.
This flexibility allows the system to adapt to changing economic conditions, but also requires investors to carefully consider currency exchange risks in their long-term planning.
Unlicensed Generation Benefits
Self-Consumption Rights
Article 6/A enables individuals and businesses to generate renewable electricity primarily for their own needs without obtaining production licenses. This provision significantly lowers barriers to entry, letting homeowners and small businesses participate in Turkey's energy transition.
You can install solar panels or other renewable systems sized to meet your needs without navigating the more complex licensing process required for commercial energy producers.
Excess Energy Sales
When your renewable system produces more than you can use, Article 6/A guarantees that the surplus won't go to waste. The law requires authorized suppliers to purchase your excess electricity at the rates specified in Annex I for ten years.
This creates a reliable secondary income stream that can:
Help offset your initial investment costs
Potentially turn your energy system into a small profit center
Grid Connection Guarantees
The law mandates that grid operators must accept excess electricity from unlicensed renewable generators. This critical provision prevents utilities from creating technical barriers that might otherwise block small-scale producers from participating.
When designing your system, you can focus on optimizing for your needs rather than worrying about whether the grid will accept your contribution.
Domestic Component Incentives
Premium Rates for Local Manufacturing
To boost Turkey's renewable energy manufacturing sector, Article 6/B provides additional financial incentives for using locally-produced components.
For facilities that entered operation before June 30, 2021, producers receive:
Premium payments on top of the standard feed-in tariffs
Five years of additional payments when using Turkish-made equipment
1.3 US cents/kWh added to payment rate for using locally manufactured PV modules
Equipment Certification Process
Article 6/B establishes that locally manufactured components must be properly certified to qualify for premium payments. The law delegates authority to the Ministry to define detailed procedures for:
Certification standards
Verification processes
Quality requirements through regulations
This certification process ensures quality while preventing misrepresentation about the origin of components used in renewable installations.
Implementation Timeline
The local component incentive structure changed after June 30, 2021. Article 6/B specifies that for facilities entering operation after this date, the President determines:
Premium rates for using domestic components
Adjustment mechanisms for these rates
Implementation period for incentives
This timeline creates different support schemes based on when your facility begins operation, requiring careful planning to maximize available incentives.
Additional Legal Provisions
Capacity Expansion Rights
Article 6/C grants renewable energy producers the right to expand their existing capacity without obtaining new licenses, provided they:
Stay within their designated areas
Don't exceed the licensed power output at the connection point
This flexibility allows producers to optimize their installations over time, taking advantage of improving technologies or favorable site conditions without additional regulatory hurdles.
Grid Connection Priority
When evaluating license applications, Article 6/C requires EPDK (Energy Market Regulatory Authority) to prioritize connections for renewable energy facilities. This priority status helps ensure your renewable project doesn't get stuck in queue behind fossil fuel generators.
In practical terms, this means:
Faster time-to-market
Reduced financial risk during the development phase of renewable projects
Transition Period Rules
Article 6/C contains special provisions for capacity expansions completed after specific dates. Notably, expansions made after license amendments approved under Article 7 of the Electricity Market Law won't qualify for the original YEK Support Mechanism but can still receive domestic component incentives if they enter operation after June 30, 2021.
These transition rules require careful timing considerations for facility upgrades.
Payment Mechanism Details
Supplier Payment Obligations
The law creates a clear payment structure where electricity suppliers must contribute to the renewable support mechanism based on their market share. Article 6 establishes that suppliers who sell electricity to consumers are financially responsible for supporting renewable production in proportion to their total sales volume.
This creates a broad funding base that distributes the cost of renewable support across the entire electricity market.
Market Share Calculation Method
EPİAŞ (Energy Market Operation Company) calculates each supplier's obligation ratio by dividing their consumer sales volume by the total market volume, as specified in Article 6. This transparent formula ensures proportional contributions based on market activity.
The system excludes renewable energy sold outside the support mechanism, focusing obligations only on conventional electricity supply to maintain fairness in cost distribution.
EPİAŞ Distribution System
Article 6 assigns EPİAŞ responsibility for:
Announcing the total YEK payment amount for each billing period
Determining each supplier's payment obligation
Collecting payments from suppliers
Distributing funds to renewable producers according to their share of total renewable production
This centralized clearing house approach streamlines financial flows and reduces transaction costs in the renewable support system.
Ready to Invest?
Turkey's renewable energy framework offers solid opportunities for foreign investors - from guaranteed feed-in tariffs to streamlined unlicensed generation options. The ten-year price guarantees and domestic component incentives create a compelling investment landscape.
As lawyers at Atlas Legal Partners in Istanbul, we regularly help international clients structure their renewable energy ventures in Turkey. We've seen how proper legal guidance from the start can maximize these incentives while avoiding common pitfalls.
What's holding back more foreign investment in Turkey's renewable sector - regulatory complexity or market perception?
