Turkey is rapidly positioning itself as a regional leader in renewable energy. Driven by growing energy demand, a commitment to reducing dependence on imported fossil fuels, and alignment with global sustainability goals, the Turkish government has made renewable energy a national priority. For investors, this creates substantial opportunities across solar, wind, hydroelectric, geothermal, and biomass energy segments.
As of 2025, over 54% of Turkey’s installed electricity generation capacity comes from renewables—a remarkable achievement that underlines the potential of this sector. This article will explore the dynamics, incentives, and key areas for investment in Turkey’s booming renewable energy market.
Why Renewable Energy in Turkey?
Several strategic factors make Turkey one of the most attractive renewable energy markets in the EMEA region:
- Geographical Advantage: Turkey benefits from an abundance of natural resources:
- Solar irradiation levels are comparable to southern Europe.
- Strong wind corridors exist in regions like the Aegean, Marmara, and Central Anatolia.
- Rich geothermal basins and numerous rivers enable geothermal and hydroelectric energy.
- High Energy Demand: With a growing population and economy, Turkey’s energy consumption continues to rise, particularly in industry, transportation, and housing.
- Energy Security Goals: Turkey imports about 70% of its energy needs. Increasing renewable production reduces external dependency and trade deficits.
- EU Green Deal Alignment: As a candidate country to the EU, Turkey is aligning its policies with the European Green Deal, creating more investment synergy.
Government Policy and Incentives
The Turkish government has implemented a variety of supportive policies for renewable energy investors:
1. YEKDEM (Renewable Energy Support Mechanism)
This feed-in tariff program guarantees a fixed purchase price (in USD) for electricity produced from renewables over 10 years. Rates vary by source:
- Solar & Wind: $0.032 to $0.050/kWh
- Geothermal: up to $0.105/kWh
- Biomass & Hydro: $0.050 to $0.133/kWh
Additional local content incentives are offered for equipment manufactured in Turkey.
2. Renewable Energy Resource Areas in Turkey (YEKA)
YEKA is a public-private partnership model offering large-scale energy projects (50–1000+ MW) via competitive tenders. Projects come with:
- Long-term power purchase guarantees
- Land allocation
- Grid access support
YEKA tenders have already attracted major players like Siemens, Kalyon, and Enerjisa.
3. Corporate PPA Support
Turkey has opened the door for corporate Power Purchase Agreements (PPAs), enabling private companies to source green energy directly from producers—an emerging area for institutional investors.
4. Tax and Customs Incentives
- Exemption from VAT and customs duty on imported machinery
- Investment incentives like tax reductions and insurance premium support in priority development zones
Sector Breakdown: Where to Invest
1. Solar Energy
Turkey receives over 2,640 hours of sunshine annually—more than Germany—making solar energy a leading sub-sector.
- Residential solar (Rooftop PV): Demand is rising as households seek self-sufficiency and cost savings.
- Utility-scale solar farms: Particularly attractive in Central Anatolia and the Mediterranean regions.
- Agri-solar and floating PV: New concepts are gaining traction with dual land usage.
Opportunities also exist in the manufacturing of solar panels, as Turkey seeks to reduce dependence on imports and boost local production.
2. Wind Renewable Energy in Turkey
With wind speeds exceeding 7 m/s in parts of western Turkey, wind power is another cornerstone of Turkey’s energy strategy.
- Onshore wind: Accounts for over 12 GW of installed capacity. Sites in Çanakkale, Balıkesir, and İzmir are especially attractive.
- Offshore wind: Still in the early stages but part of Turkey’s 2035 strategy. Major tenders expected soon.
Investors can consider IPP (Independent Power Producer) partnerships, equity in local wind projects, or turbine manufacturing.
3. Hydroelectric Power
Turkey has a long history of hydroelectric power development and currently operates over 700 hydro plants, supplying nearly 30% of national electricity.
- Small-scale hydro (<10 MW) remains underdeveloped and open for investment.
- Rehabilitation of older dams presents opportunities for efficiency upgrades and digital monitoring systems.
4. Geothermal Energy in Turkey
Turkey ranks fourth globally in installed geothermal capacity. The Aegean region, especially around Denizli, Aydın, and Manisa, holds vast potential.
- Investments include geothermal plants, district heating systems, and even agri-tech applications (greenhouse heating).
- Geothermal also supports lithium extraction, a strategic raw material for electric vehicles and batteries.
5. Biomass and Waste-to-Energy
Biomass energy is gaining attention due to Turkey’s agricultural richness. There’s untapped potential in:
- Agricultural waste (hazelnut shells, olive pits, etc.)
- Urban waste (biogas, landfill gas recovery)
- Industrial waste-to-energy initiatives
The government aims to increase biomass capacity to 3,000 MW by 2030, up from 2,100 MW in 2023.
Investment Entry Routes
Foreign investors can access the Turkish renewable market through several channels:
- Greenfield Projects: Build and operate new facilities via YEKA or private land acquisitions.
- Equity Partnerships: Acquire shares in existing projects or local firms.
- Project Financing: Participate through PPPs or co-financing with Turkish development banks.
- Equipment and Technology Supply: Provide solar panels, turbines, inverters, and digital management systems.
Notable investors in Turkey’s renewable market include ENEL Green Power, Siemens Gamesa, GE Renewable Energy, and TotalEnergies.
ESG and Sustainable Finance
Environmental, Social, and Governance (ESG) principles are becoming central in Turkish energy investments:
- Green bonds and sustainability-linked loans are increasingly used for funding.
- Local banks (e.g., Garanti BBVA, Türkiye İş Bankası) are aligning with global climate finance frameworks.
- Foreign funds are prioritizing Turkish projects with clear ESG metrics, emissions reductions, and community engagement.
Risks and Challenges
Despite its growth, investing in Turkish renewables requires risk awareness:
- Grid integration challenges: In some regions, connection delays and infrastructure issues persist.
- Regulatory unpredictability: Though improved, energy policy can shift quickly due to economic or political factors.
- Currency risk: Fluctuations in the Turkish lira may impact returns if revenues are in TRY and costs in USD or EUR.
- Permitting delays: Environmental impact assessments (EIA) and local opposition can delay large projects.
Due diligence, local partnerships, and legal counsel are essential to mitigating these risks.
Outlook and Strategic Targets for 2035
Turkey’s National Energy Plan outlines ambitious goals:
- 35 GW solar capacity
- 30 GW wind capacity
- 2 GW offshore wind
- 5 GW battery storage capacity
- Net-zero emissions by 2053
These targets are supported by regulatory reforms, international cooperation, and technological modernization. For long-term investors, the trend is clear: Turkey is going green.
The renewable energy sector in Turkey is no longer an emerging niche—it’s a national priority backed by strong policy, favorable geography, and rising domestic and international demand. Solar, wind, hydro, geothermal, and biomass all offer viable investment paths, with competitive returns and strategic importance.
For impact investors, climate-conscious funds, and companies looking to diversify into clean energy, Turkey is one of the most promising frontiers in 2025 and beyond. The transition to a greener future is underway—and now is the time to be part of it.
