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POL-51

This is a proposal for discussion, not an enacted law.

Ali Zuweid’s Political Programme

Energy, Infrastructure, Water, Environment and Urban Development

Renewable Energy, Distributed Generation and Energy Efficiency Law

Document numberPOL-51
TypeProposed federal bill
Version1.0
Publication and update date5 October 2026

Executive summary

The bill regulates three pathways that must work together: utility-scale renewable investment; enabling citizens and businesses to generate distributed power and sell surpluses on fair terms; and improving energy efficiency so expanded installed capacity does not become a permanent race against growing waste and demand. It establishes rules for tenders, connection, storage, energy communities, appliance and building standards, energy performance contracts and guarantees of origin.

The draft adopts institutional separation: the Ministry sets policy and plans; the Electricity Market Regulatory Authority regulates connection, metering, settlement and the market; the Ministry of Environment handles climate and environmental responsibilities; and a coordinating national council prevents conflicting decisions. This avoids a parallel regulator or duplication of existing institutions.

For distributed generation, the draft makes net billing the default regulatory instrument, while permitting net metering where its benefits are demonstrated. Rooftop systems should neither become an open-ended, opaque subsidy nor deprive prosumers of fair value for surplus power. The draft also requires a simplified pathway for small systems and safeguards for consumers and equipment safety.

Proposed legislative policy

The Law is based on renewable energy being part of the electricity market, not a separate sector. A large solar project requires a competitive contract, connection and balancing; a household rooftop system requires a meter, settlement and consumer protection; and energy efficiency reduces the need for additional generation and grid investment. The Law therefore combines specific provisions for these pathways while retaining general market functions in the Electricity Market Regulation Law.

Legislative design foundations
AreaLegislative rule
Large projectsCompetition as the general rule, bankable contracts, transparent grid costs and no automatic state risk guarantees.
Distributed generationSimplified registration, hosting-capacity maps, bidirectional meters and net billing with published export values.
Energy efficiencyPeriodic plans and targets, audits of large facilities, appliance and building performance standards, and energy performance contracts.
Storage and flexibilitySeparate treatment preventing double charging and enabling participation in ancillary services and demand response.
FinancingTemporary, funded and transparent incentives; no off-treasury fund or tax exemption by administrative instruction.
Climate and environmentImpact and climate-resilience assessment, end-of-life management and separation of guarantees of origin from carbon credits.
GovernanceNo parallel regulator; clear coordination among the Ministry, Authority, environment, standardisation and investment bodies.

Statement of reasons

This Law is enacted to diversify Iraq’s energy mix and strengthen electricity security; provide a clear legal investment environment for renewables; enable citizens and businesses to generate distributed power and sell surplus without undermining fair grid-cost allocation; improve energy use in buildings, industry and appliances; regulate storage, flexibility and guarantees of origin; and clarify responsibilities to prevent duplicate regulation and protect consumers, the environment and public funds.

Explanatory memorandum

1. Why does Iraq need more than a renewable-energy promotion law?

Permitting power plants alone does not resolve questions arising as solar and wind shares grow: who connects projects, who pays for grid reinforcement, how rooftop exports are compensated, how poor equipment is excluded, how savings are measured, and how storage and demand management become system resources. These questions cross energy, investment, consumer, construction and environmental boundaries and therefore require an integrated framework.

2. Parliamentary status

The Council of Representatives held the first reading of the Renewable Energy Regulation Bill on 23 August 2026. Electricity and Energy Committee work showed continued discussion through 4 October 2026. This proposal offers an integrated formulation for expanding or restructuring the parliamentary text while preserving the existing legislative process and making no claim that the present text is in force.

3. Separating policy from regulation

The draft addresses a major institutional conflict: when one government body makes policy, licenses, sets tariffs and operates companies, entry and investment rules become less predictable. The Ministry therefore retains policy, the independent Authority proposed under the Electricity Market Regulation Law handles market regulation, and a coordinating council serves renewables and efficiency.

4. Net billing instead of open-ended support

One-for-one net metering may be simple initially but can become an implicit subsidy as uptake grows if small exporters receive full retail prices including network and service costs they do not provide. The draft therefore defaults to net billing while retaining net metering where beneficial for particular categories or areas. The aim is not to undervalue distributed energy but to price it transparently according to its true system value.

5. Efficiency is part of energy security

Every peak megawatt avoided through an efficient building, appliance or industrial process may reduce generation, network and fuel needs. The draft therefore links appliance standards, building efficiency, industrial audits and demand response to national planning rather than treating them as voluntary awareness campaigns.

6. Climate resilience

Iraqi conditions make climate-sensitive design operationally necessary. High temperatures and dust storms reduce panel output and increase cooling loads, while water scarcity constrains cleaning and thermal and hydroelectric generation. The Law therefore requires risk assessment, appropriate maintenance and minimal water use.

7. Fiscal fairness

The draft creates no independent off-treasury fund or open-ended exemptions. It permits incentives only within law and budget after cost-benefit analysis, with disclosure of double support and sovereign commitments, preventing clean-energy policy from becoming an invisible long-term fiscal obligation.

8. Federalism and shared responsibilities

Because the Constitution makes principal electricity sources, distribution and environmental policy shared responsibilities, the Law adopts minimum federal grid, safety, traceability and consumer-protection standards, allowing regional and governorate measures within their powers, including stricter requirements, with mutual recognition to prevent market fragmentation.

Legislative and institutional alignment

Main alignment points
Reference or bodyRelationship to the proposed LawRequired action
Iraqi ConstitutionArticles 33 and 114 establish environmental protection and shared electricity and environmental responsibilities.Implement through coordination without exceeding constitutional powers.
Ministry of Electricity Law No. 53 of 2017Regulates the Ministry and existing sector.Review duties and instructions conflicting with policy–regulation separation when the electricity market law takes effect.
Proposed Electricity Market Regulation Law POL-50Regulates the Authority, market, transmission, distribution, tariffs and metering.Issue distributed-generation codes and rules under both laws without creating a second regulator.
Environmental legislationRegulates impact assessment, pollution and hazardous materials.Integrate impact assessment and end-of-life plans; energy licences do not replace environmental approval.
Building Law and national codesRegulate building safety and performance.Include efficiency in the code rather than a parallel code in this Law.
Standardisation and quality controlRegulate standards and conformity.Adopt equipment standards, efficiency labels and testing laboratories.
Investment, procurement and contractsRegulate permits and public contracting.Use competition, transparency and risk-allocation rules for large projects.
Iraq’s Paris Agreement Accession Law No. 31 of 2020Establishes the international framework for climate commitments.Align planning, carbon accounting and international transfers with the competent national authority.

Transitional provisions and implementation requirements

Initial transition roadmap, updatable by regulation
Time from commencementActionLead body
0–3 monthsAppoint the National Council and institutional focal points; inventory existing renewable-energy regulations and instructions.Council of Ministers/Ministry
0–6 monthsIssue simplified small-system registration, a connection application form and consumer disclosures.Authority or Ministry during transition
0–9 monthsLaunch an initial hosting-capacity map, project database and qualified-installer register.Network operators/Centre/Authority
0–12 monthsIssue net-billing arrangements, aggregator and energy-community rules, and updated connection codes.Authority
0–12 monthsIssue or update priority appliance standards and efficiency labels.Standardisation and competent bodies
12–18 monthsComplete transfer of temporary regulatory functions to the Electricity Market Regulatory Authority once operational.Ministry/Authority
Within 18 monthsApprove the first integrated five-year national renewable-energy and efficiency plan.Ministry/Council/Council of Ministers
Within 3 yearsFirst legislative evaluation of performance, costs, uptake and consumer protection.Ministry/Authority/Council of Representatives

Financial and implementation impact

The Law requires no new independent renewable-energy authority, reducing establishment costs and avoiding duplicate staff and systems. Direct public costs concern upgrading digital systems and databases, resource and grid-capacity maps, metering, standardisation and training programmes, and regulatory and technical capacity.

Incentives or household and public-facility support programmes are not automatic statutory commitments. They require annual or multiyear budget appropriations or disclosed financing. Each programme must first identify a baseline, beneficiary numbers, support value, expected fuel and electricity savings and distributional impact, followed by published evaluation of results.

At system level, renewables and efficiency can reduce fuel consumption, exposure to fluctuating gas supplies and outage costs. Savings depend on actual fuel prices, grid absorption capacity and balancing, storage and financing costs. The Law therefore sets no unverifiable fixed financial estimate but requires appraisal before commitment.

Brief international comparison

Regulatory practices adaptable to Iraq
PracticeRelevance to Iraq
Prosumer principle and simplified registrationLower transaction costs for small systems and avoid imposing large-plant requirements on households or shops.
Net billing or export-value pricingProvide sustainable compensation as the market grows and reduce transfers of grid costs to non-participants.
Guarantees of originSeparate proof of renewable electricity origin from physical electricity and support voluntary corporate contracts.
Minimum performance standards and efficiency labelsPrevent entry of appliances cheap to purchase but costly over their lifetime because of consumption.
Audits and energy-management systems for large facilitiesMove efficiency from general campaigns to measurable institutional management.
Energy communitiesEnable tenants, complexes and villages to share assets rather than confining benefits to owners of individual rooftops.
Competitive auctions for large projectsUse competition for price discovery and reduce reliance on long-term fixed feed-in tariffs.

This comparison draws on European Union renewable-energy and energy-efficiency directives and International Renewable Energy Agency literature, adapted to Iraq’s grid, subsidies, institutional responsibilities and climate.

Sources and references

  1. Iraqi Council of Representatives — Iraqi Constitution.
  2. Ministry of Justice — Iraqi Gazette, issue 4443: Ministry of Electricity Law No. 53 of 2017.
  3. Ministry of Justice — Iraqi Gazette, issue 4618: Law No. 31 of 2020 on Iraq’s accession to the Paris Agreement.
  4. Iraqi Council of Representatives — decisions and recommendations of the 23 August 2026 sitting: first reading of the Renewable Energy Regulation Bill.
  5. Iraqi Council of Representatives — Electricity and Energy Committee discusses the Renewable Energy Bill, 4 October 2026.
  6. Iraqi Ministry of Environment — climate change and nationally determined contribution documents.
  7. Ministry of Environment — updated nationally determined contributions document 2025.
  8. IRENA — Energy Transition Assessment: Iraq, 2025.
  9. IEA — National Climate Resilience Assessment for Iraq, 2025.
  10. UNDP Iraq — Catalysing the Use of Solar Photovoltaic Energy.
  11. UNDP Iraq — Energy Transition: From Policies to Actions in the Power Sector of Iraq, 2025.
  12. Central Bank of Iraq — follow-up on the renewable-energy financing initiative, 24 June 2026.
  13. European Union — Renewable Energy Directive (EU) 2023/2413.
  14. European Union — Energy Efficiency Directive (EU) 2023/1791.

Online sources accessed: 5 October 2026.

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