Iraq Scraps Import Duties on Solar Systems and Approves New Electricity Supply Deal
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The Arab Post
- . October 21, 2026
- . Update: October 21, 2026 3:40 pm
The Iraqi government today took “decisive steps” to restructure the floundering energy sector. Iraq scraps import duties on solar systems, The Council of Ministers made on Tuesday, 20th October 2026, a formal decision to Iraq scraps import duties on solar systems.
In the first decision of this kind, the cabinet led by Prime Minister Ali Al-Zaidi voted to phase out customs duties on all imported solar energy systems and end the double taxation that affected these systems. It’s a broad new law intended to strengthen the private sector and incentivize average homeowners and business owners to buy clean energy technology, and immediately alleviate the strain on the state’s overloaded electrical grid.
The government also approved, at the same meeting, an important new electricity supply deal. The integrated projects will provide significant generation capacity to the grid, quickly, ahead of the seasonal peak demand in the country.
Expanding Previous Tariff Reductions
These import taxes will be completely withdrawn, in addition to recent preliminary market interventions. The Iraqi Customs Authority has recently lowered customs on renewable energy elements greatly earlier this year.
Earlier, the state reduced tariffs for PV panels from 33% to 5% and other components, such as cables and inverters, and also on lithium batteries.Earlier, the state had cut PV panel tariffs down from 33% to 5%, and also on other components, such as cable and inverter tariffs, and also on lithium batteries. The General Secretariat for the Council of Ministers hopes, therefore, to render off-grid solar solutions affordable to working class families and local manufacturers by bringing down the tax rate to zero.
Stabilizing the National Grid – Iraq scraps import duties on solar systems
The new electricity supply deal is meant to solve the problem of the state-owned electricity utility’s serious, systematic failures. The city of Baghdad has claimed it has the capacity to produce 24,000 MW of electricity within its own borders last summer, but millions of residents still have electricity problems lasting for several hours every day.
The energy shortage is one of the factors which regularly leads to disturbances and losses to the national economy worth billions of riyals, according to briefings by Shafaq News. The Iraqi Ministry of Electricity is striving to make up this huge sovereign energy deficit by getting immediate auxiliary power deals, while at the same time encouraging decentralized solar generation.
Prime Minister chairs the cabinet session
A Broader Governance Push
The energy reforms were among the many steps taken during a very busy Tuesday cabinet meeting. The Prime Minister’s media office also confirmed that the council also made key decisions on health, maritime transport, water security and the regulation of the oil market. In addition, the new ministers of the cabinet had to make an oath of honor in the meeting, marking a fast takeover of the executive power in the cabinet.
In the end, Baghdad is a sign of the government’s permanent move to renewable energy sovereignty, as official scrapping of customs on solar systems is set to take place. The Iraqi government’s ambitious tax break comes with a strong new offer on electricity, which means Iraqis will have the means to finally rid themselves of the decades of power failures.
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