Beyond Barrels and Generators: Solar Power Economics and Market Potential in Iraq

Abstract

This systematic review synthesizes findings from peer-reviewed studies examining solar power deployment in Iraq, revealing substantial economic viability and market potential with critical segmentation based on baseline energy infrastructure. Solar photovoltaic systems demonstrate dramatic cost advantages over diesel generators, with levelized costs of $0.035/kWh compared to $0.598/kWh for diesel representing a 17-fold difference and lifecycle cost savings ranging from $3,780 to over $11,000. In areas with frequent blackouts and heavy generator dependence, payback periods range from 3.6 to 7 years, with systems achieving capacity factors near 18% and annual yields of 1,514–1,745 kWh/kWp under Iraq's favorable solar resource of 4.6–5.2 kWh/m²/day global horizontal irradiance. However, where subsidized grid electricity provides reliable supply, solar requires feed-in tariffs above $0.10/kWh for economic viability. The key insight is that Iraq's chronic electricity shortages and widespread generator usage with over 90% of households relying on neighborhood diesel generators create a dual-tariff market structure where effective electricity costs reach $0.10–0.20/kWh. This positions solar as highly competitive for the substantial population experiencing daily blackouts of 12–18 hours, with additional environmental benefits of 689–5,295 kg CO? avoided annually per installation. The market potential is strongest as a generator replacement technology rather than a grid-only alternative, with hybrid configurations incorporating storage achieving optimal techno-economic performance.