Iran's farmers turn to solar energy for first time to ensure steady electricity supply

Iran's grain farmers are turning to solar energy for the first time this year, following government orders to ensure a steady supply of electricity during power shortages, Kaveh Zargaran, chairman of the Iran Grain Union, said in a recent interview in Dubai.

Iran has ample renewable energy capacity, with nearly 13 GW in 2024 -- more than any other country in the Middle East, according to the International Renewable Energy Agency. The country faced a severe power shortage earlier this year, leading to days of national blackouts and the consequent shutdown of industries, state establishments, banks and schools.

"The government has always been supportive of farmers, such as making farmers exempt from paying taxes, and they pay lower prices for energy than the general population," such as gasoline and diesel, Zargaran said.

The solar energy will be used for farming activities such as digging deep underground for water and storing it in wells for later use in planting, among other applications. The grain union has 130 members.

Iran controls wheat imports through tariffs and occasionally imposes bans on them, Zargaran said.

For the year ended March 2025, farmers sold 12 million mt of wheat to the government at prices above global averages, making wheat "interesting for the farmers," he added.

This production is sufficient to meet domestic demand, with the government importing an additional 2 million mt/year for strategic storage, mostly from Russia, Zargaran said.

Wheat rebound

Russian wheat prices have been rising recently, reaching $250/mt as of April 14, up from $237/mt at the end of 2024, according to Platts assessments. Platts is part of S&P Global Commodity Insights.

Vegetable oilseed imports from Ukraine have slumped, while feed corn imports from the country have shifted from direct shipments to imports through third-party countries since the Russia-Ukraine war, Zargaran said.

Brazil and Russia are the largest suppliers of feed corn to Iran, he added.

"When there is demand and there is supply, traders will find ways to do the job of trades. At the moment, Ukrainian corn via other countries is discharged in Iranian ports, and if there is demand for other products, there is the possibility of imports," Zargaran said.

Iran's flour millers have nearly halted shipments to Iraq, as Turkish flour is cheaper and more readily available there, he added.

"There is no possibility for competition between Iranian millers and Turkish millers in the Iraq market," Zargaran said.

The flour that Iran can export to Iraq is made from Russian wheat and is more expensive than Turkish flour, which is supported by Turkey's government policies.

"Russia has given an 18% export exemption to flour exporters, so recently a lot of Iranian traders who are still in the Iraqi market have tried to supply flour from Russia so that they can compete with Turkey," Zargaran said. "Moreover, it is easy for Iranian traders to transit Russian flour from west northern ports of Iran by trucks to north and even south of Iraq."