Turkey: Solar PV Opportunity (2025 focus)

Turkey: Solar PV Opportunity (2025 focus)

This is a focused, investor- and developer-oriented briefing on the Turkey solar PV opportunity — current state, pipeline, commercial & technical considerations, risks, and a prioritized go-to-market playbook you can use immediately.

Executive snapshot

• Ambition & scale: Turkey has rapidly expanded solar capacity and set ambitious longer-term targets to substantially increase wind and solar capacity toward 2035 — national plans envision a major scale-up that will materially raise renewable penetration and reduce gas import exposure.
• Recent traction: Türkiye doubled installed solar capacity in a short period and reached ~19–20 GW by end-2024 (surpassing earlier 2025 targets early). Rapid build-out continued through 2025 with strong additions from utility-scale and distributed PV.
• Procurement push: The Ministry of Energy’s YEKA (renewable resource area) tenders and YEKA GES rounds are allocating multi-hundred MW tranches (e.g., the YEKA GES-2024 ~800 MW awards), with local content requirements and long-term PPAs that aim to improve bankability.

1) Market structure & procurement landscape

• Mixed procurement model: Turkey combines large centralized YEKA auctions (site + offtake design), competitive tenders, and a growing merchant / bilateral market for distributed and behind-the-meter assets. YEKA tends to set benchmarks for tariffs, local content and panel supply rules.
• Public support & incentives: The government has introduced policy measures (tender design, permitting streamlining plans and pilot price-floor / long-term purchase guarantee concepts) to reduce financing risk and accelerate permitting. International finance institutions are engaging (e.g., World Bank programs to support distributed solar and storage).
• Competitive developer ecosystem: Large domestic groups (Kalyon, Zorlu, Akfen, Enerjisa and others) and international EPCs are active — expect fierce competition on utility tenders but good opportunities for niche differentiation (localization, storage integration, industrial offtake).

2) Key projects & pipeline (selected)

• YEKA parcels (2024–2025 rounds): The YEKA GES-2024 auction allocated ~800 MW across regions (Konya, Karaman, Malatya, Van, Antalya, Kütahya) to a small set of winners, with 20-year offtake terms and local content obligations. These parcels form the backbone of near-term utility additions.
• Rapid additions across regions: Government updates and industry reports indicate several GW additions in 2024–2025 driven by both tendered utility plants and distributed generation, including projects sited in central Anatolia and southern provinces where irradiation and land availability are favourable.

3) Commercial & financing environment

• Bankability & offtake structures: YEKA-style tenders with long-term offtakes and clear contractual frameworks improve bankability. Newer schemes being discussed (price floors, long-term purchase guarantees) aim to further de-risk revenue tails and mobilise concessional finance.
• Local content & supply chain: YEKA conditions often include panel/component local content thresholds (e.g., 50–75% in some tenders). Developers without clear localization plans will be disadvantaged in scoring and permit approvals.
• Financing sources: Expect a mix of Turkish commercial banks, international commercial lenders, ECAs for equipment suppliers, and IFI / multilateral facilities (given active World Bank support programs). Structuring should consider currency risk (TRY exposure) and potential local content capex.

4) Technical & grid integration considerations

• Resource quality & siting: Central Anatolia (Konya/Karapınar) and southern provinces offer high irradiation and large contiguous land tracts suitable for utility-scale PV and bifacial deployments. Terrain and land title diligence are critical.
• Soiling, temperature & seasonal variability: Continental climate with dust/soiling and seasonal temperature swings affects PR; models must include realistic soiling losses, thermal derating and water-efficient cleaning strategies where needed.
• Transmission & queue management: TEİAŞ transmission constraints and queue management can create evacuation timing risks — early grid studies and secured grid connection capacity via YEKA/connection agreements are essential to meet COD windows.

5) Industrial linkage & demand-side opportunities

• Industrial electrification & green hydrogen: Turkey’s industrial base and plans to increase electrification create captive offtake and corporate PPA demand (steel, cement, industrial parks). Green hydrogen pilots and industrial decarbonization programs may create anchor demand for firmed renewable supply.
• Corporate & merchant routes: Corporate PPAs and merchant exposure are growing, especially for distributed assets and for corporates seeking to hedge power costs and meet sustainability targets. Buyers often seek local content or domestic co-investment features.

6) Key risks (and mitigations)

• Permitting & timing risk: Historically lengthy permitting / licensing processes can delay projects. Mitigation: engage local counsel/consultants early and prioritise YEKA/auctioned parcels where permitting is more structured.
• Currency & macro risk: TRY volatility can affect OPEX and debt servicing for foreign-currency financed projects; consider revenue hedges, local currency debt where available or FX pass-through in offtake agreements.
• Local content & industrial policy: Strict local content rules can raise capex or supply chain complexity. Mitigation: form JV with local manufacturers or assembly partners and build clear localization roadmaps.
• Grid curtailment & queue risk: Rapid capacity additions can lead to curtailment without commensurate transmission upgrades. Mitigation: secure firmed connection agreements, consider storage/firming solutions, and diversify site locations.

7) Actionable go-to-market (GTM) playbook — prioritized steps

Immediate (0–3 months)

1. Tender intelligence & shortlist: Subscribe to Ministry (Enerji Bakanlığı) YEKA announcements and TEİAŞ connection queue updates; prioritise YEKA parcels and tenders with clear local content scoring or sovereign support.
2. Local partnerships: Lock in 1–2 Turkish strategic partners (EPC, industrial holding, or local manufacturer) to satisfy local content and expedite permitting. Start LOI/term-sheet talks.
3. Technical baseline: Commission high-resolution resource & soiling studies and initial grid impact assessments for shortlisted parcels.

Short term (3–9 months)
4. Bid readiness & finance: Build bankable financial models with conservative LCOE, soiling OPEX, curtailment scenarios and currency stress testing. Obtain soft indications from Turkish banks, ECAs and IFIs.
5. Localization & supply chain plan: Prepare credible local content and assembly/manufacturing roadmaps to meet YEKA scoring and government expectations.
6. Storage optionality: Model PV + BESS hybrids to improve bid competitiveness and reduce curtailment exposure.

Medium term (9–24 months)
7. Consortium & equity close: Secure anchor equity (domestic strategic or IFI/institutional co-investor) to accelerate FID and improve debt terms.
8. O&M & performance: Tender long-term O&M with performance-linked SLAs, proactive soiling mitigation strategy and spare-parts localization.

8) Tender & bid best practices — checklist

• Lead with a strong local partner and demonstrate practical local content commitments.
• Offer PV+storage/firming options rather than energy-only bids to stand out on system integration and curtailment mitigation.
• Build conservative financial models (irradiation, soiling, COD delays, TRY volatility).
• Pre-arrange debt indications and consider IFI / ECA support for lower blended financing costs.

9) High-level financial & timeline expectations

• PPA tenor: YEKA tenders typically include 15–20 year purchase terms (specifics vary by tender); long tenors and guaranteed offtake materially improve bankability.
• Typical COD timeline: Utility PV projects commonly target 18–36 months from financial close, but permitting and transmission upgrades can extend delivery — factor 24–36 months into timelines for greenfield large sites.
• Tariff sensitivity: Expect tight auction pricing in competitive YEKA rounds — stress-test for low tariff scenarios, increased OPEX, and longer grid lead times.