In Turkey’s sprawling mega-city of Istanbul, there is perhaps no clearer indicator of rampant inequality than the skyline. The harbor-side mansions that litter the shores of the Bosphorus, known as yalı in Turkish, are iconic, often historic properties, passed down through generations of Istanbul’s elite families. They sell for prices in the millions (or tens of millions) in a city where the average worker takes home just 31,000 Turkish lira (just over $5,000) a year – although professionals earn many times this figure. The tiled rooftops of Istanbul’s wealthy Sarıyer district are distinctly colourful in a city where most are confined to living in drab grey apartment blocks.
On the other end of the spectrum is the gecekondu – literally, “put up overnight” – slum housing, built rapidly to avoid the hassle and expense of purchasing land and obtaining construction permits. A report by the newspaper Sabah states that one-third of Istanbul’s 16 million inhabitants reside in these neighborhoods, typically after migrating from impoverished corners of Anatolia. This figure is a contentious one and there have been government initiatives to reduce the number of people forced to live in such conditions. Sheets of rust covered corrugated steel and ceramic tiles protect Istanbul’s underclasses, as best they can, from the elements.
This visible delineation between rich and poor – a remarkable inequality of housing – is apparent all throughout Turkey, not just in crowded Istanbul.
Cut to Turkey’s PV sector. It is well-noted that Turkey has some of the highest solar potential in Europe – experiencing 2,714 hours of sunlight per year (compared to Germany, with a mere 1,738 hours) – but also that these favorable conditions have not yet been adequately exploited. There are a number of reasons for this: For one, Turkey has only recently embraced PV technology as part of a bid to become less dependent on foreign energy imports. Furthermore, seeking planning approval from multiple arduous layers of bureaucracy is a headache for both foreign and local investors, as are the high upfront costs associated with financing licensed projects.
One of the biggest hurdles to the adoption of PV is the lack of incentives for the average Turkish consumer to adopt solar technology in the rooftop, or DG, segment. Encouragingly for the country’s solar sector, it is one that the government is slowly trying to address. One relatively straightforward solution is net metering: promised in both 2018 and put in place in May 2019.
On paper, providing consumers with the opportunity to sell excess power back to the grid looks an excellent motivator for more Turkish households to install rooftop PV. The greatest challenge for the rooftop segment in Turkey at the moment is that upfront costs to consumers are high and financing difficult. Furthermore, according to the Institute for Energy Economics and Financial Analysis (IEEFA), under the existing net metering system, the average payback period for rooftop PV is 16 years. According to that same report, the soon-expected changes to net metering would reduce a rooftop array payback period by a quarter, down to 11 years for new installations. Additional proposed reforms – the removal of the 18% VAT on equipment, the removal of fixed fees, the subsidizing of loans, and the matching of Germany’s feed-in tariff ($0.14/ kWh) – would see the payback window for systems installed in 2020 fall to just under seven years.
Outside of Istanbul, especially on the sunny southern coast, where multi-story apartment blocks give way to a greater multitude of single-family dwellings and summerhouses, the picture is brighter. But it remains to be seen whether Turkish consumers will find the incoming net metering provisions a sufficient motivation to embrace solar energy. All eyes will be on the new policy announced this May.