The guaranteed purchase price paid by the government for solar power generated by private companies or households is 30% higher if locally-made panels are used, ILNA quoted Jafar Mohamadnejad Sigaroudi as saying.
A new directive to raise renewable tariffs was announced by Energy Ministry last week to encourage investment in green energy.
Accordingly, the new tariff is 4.9 cents per kilowatt hour for photovoltaic power stations, which will reach 6.4 cents per kWh if the plants are equipped with domestic panels, Financial Tribune reported.
There are more than 115 large solar farms in Iran, and around 3,500 small-scale solar installations in cities and villages. Over 2,500 rooftop photovoltaic power stations will be set up by next year, mainly in deprived and rural areas.
New prices for generating electricity from biomass have risen by 50% -- 3.6 cents per kWh.
However, if a waste-to-energy plant is set up in the northern regions that have much more tourists and therefore more waste is produced, the guaranteed electricity purchase rates will be double the new tariffs, Mohamadnejad Sigaroudi said.
By offering higher prices, the government is trying to encourage private firms to invest in renewables because such firms can and should play a bigger role in developing green energy.
Iran has a diverse climate of vast windy lands and more than 300 sunny days a year, which makes it ideal to tap into wind and solar power.
Private companies have invested an estimated $1 billion in the gradually expanding renewable sector, mainly solar and wind. Due to government funding constraints, private firms have been urged to play a bigger role in promoting clean energy.
More than 80% of electricity demand in Iran is met by thermal power plants that run on fossil fuels. Renewable capacity stands at 850 megawatts, which is barely 1% of the total 82,000 MW capacity.