Solar Takes Off: Can It Fuel Armenia’s Energy Independence?

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Solar power has seen remarkable growth worldwide in recent years. Driven by falling costs, both rooftop systems and large-scale solar farms have become common in many parts of the world. Armenia, with its abundant sunshine, is riding on this global wave. Solar’s share in Armenia’s total electricity output in 2024 stood at 10.4%, well above the global share of 6.9%.

Total solar production of 975 gigawatt hours (GWh) is divided nearly equally between utility-scale farms and distributed generation (mostly rooftop). Of this distributed generation, 61% is estimated to have been fed back to the grid.

A recent World Bank report found that Armenia’s reliance on natural gas in its energy supply is among the world’s highest (63%) with much of the imports coming from Russia, with the rest from Iran. Decarbonization and transition to domestic renewable energy sources, primarily solar, “brings opportunities for Armenia to strengthen energy security,” it noted.

The World Bank estimates that Armenia will need to invest $3 billion in the electricity sector to transition to a solar-powered economy with substantial parallel investments in international and domestic grid interconnections and reinforcement, and energy storage.

Current installed solar capacity stands at almost 690 MW. Under the announced policies scenario, installed solar capacity is projected to reach 1 GW by 2030 and 4 GW by 2040, with the more ambitious net zero scenario targets of 1.7 GW and 5.2 GW, respectively. The report estimates that by 2060, solar and wind would represent 60% of Armenia’s total installed capacity and 54% of generation.

Largest Farm Goes Online, With More on the Way

According to data by the Public Services Regulatory Commission (PSRC), the country’s utilities regulatory body, Armenia has 75 operating utility-scale solar farms with a total installed capacity of 289.4 MW and annual generation of 540 GWh. Utility-scale solar capacity has expanded more than twenty-fold between 2020 and 2024.

Armenia’s largest solar farm Masrik-1 went online in mid-May. The plant is situated north of Vardenis in Armenia’s Gegharkunik region not far from the border with Azerbaijan. With 55 MW installed capacity and around 130 GWh of annual production, it is the country’s first industrial-scale solar farm. Covering 130 hectares, it consists of nearly 115,000 panels and can provide power to 20,000 homes. Announced in 2017, it faced years of delays and uncertainty. Construction commenced in November 2023 and was completed by late 2024. It was built by a Spanish-Dutch consortium that is ultimately owned by Abdul Latif Jameel, a Saudi holding company.

A farm more than three times larger than Masrik is planned to be built near Talin in the Aragatsotn region by Masdar, an Emirati state-owned renewables developer. With a $174 million investment, it is set to have installed capacity of 200 MW and will generate 320 GWh annually. The involvement of the now-defunct Armenian National Interests Fund (ANIF) in the project, where the state holds a 15% stake, created uncertainty about the farm’s future. On June 20, the government transferred control of its stake to a new state-run company under the Ministry of Economy. Earlier in April, Economy Minister Gevorg Papoyan and Masdar CEO Mohamed Jameel Al Ramahi discussed the project, confirmed a roadmap and agreed to begin construction in early 2026.

Moreover, the Public Services Regulatory Commission has given permits for the construction of 47 farms with 295.5 MW capacity and 584.9 GWh production. The largest ones are set to have a capacity of 24.9 MW and 21 MW in Armavir and a 15 MW one in Charentsavan. The latter is to be built by a large metallurgical plant for its own uses.

Rooftop Solar Boom

On top of the utility-scale plants (now totaling 344.4 MW with Masrik-1 online), Armenia has 37,465 grid-connected solar power systems (like rooftop) with a total capacity of 485.5 MW, as of May 1, 2025. 

Distributed (autonomous) generation took off after a 2016 decision by the Armenian government to greatly ease the process by removing licensing requirements and taxes for plants up to 150 KW in capacity. By the end of 2017, a mere 200 systems had been installed, which jumped to more than 4,100 systems in 2020 with an installed capacity of 76.8 MW.

Wind Ambitions

While solar’s stellar rise appears unstoppable, wind power faces significant challenges in Armenia. The strongest winds are in the mountain passes at high altitudes, which raises costs of transporting and installing turbines with increasingly large blades. Solar, on the other hand, can be installed nearly everywhere with relative ease.

Armenia’s wind energy sector remains minuscule, contributing just 1.22 GWh to Armenia’s electricity output in 2024, or 0.013% of the total. The PSRC lists just three utility-scale wind plants in the entire country with a combined capacity of 2.9 MW. Nevertheless, the Armenian government aims to increase installed wind energy capacity to as much as 500 MW by 2040. The World Bank report sees 90 MW being installed by 2030, playing a much smaller role than solar. By 2060, however, it estimates 1 GW (1,000 MW) of wind energy will be installed to meet the goals.

The Armenia Renewable Resources and Energy Efficiency Fund has been tasked by the government to determine the most optimal locations in the country for building turbines. Last October, a 120 meter-tall tower was installed at the Karakhach mountain pass in the northern Shirak region, along with a lidar, to measure wind speeds there. The Ministry of Territorial Administration and Infrastructure said in a press release that Armenia’s first industrial-scale wind farm is planned to be built there with funding from the Asian Development Bank. Preliminary plans envisage a 150 MW windfarm at Karakhach, requiring approximately a $150 million investment.

Plans to build a wind farm at Karakhach date to at least 2009, when the PSRC granted a construction license to an Italian firm, which did not make the investment. It remains to be seen whether things will be different this time.

Challenges Ahead

Due to the rapid expansion of solar, the power grid needs to be upgraded to keep up with the pace. Energy specialist Vahe Davtyan argues that Armenia’s rapid expansion of solar power is creating energy system risks due to lack of proper integration, storage strategy, and coordination with existing infrastructure—similar to issues that recently caused major blackouts in Spain. 

Prime Minister Nikol Pashinyan recently acknowledged the problem, noting that current installed capacity is nearly equal to two nuclear plants (Metsamor has 440 MW capacity). Small autonomous solar installations are increasingly consuming their own production rather than feeding electricity back into the grid, which is contributing to decreased overall electricity production statistics and reduced domestic demand from the national grid.

Since solar and wind are inherently intermittent, both small and large storage capacity will need to be installed in upcoming years to ensure grid stability and reliable power supply. Government incentives and regulations should encourage this process.

One of the memoranda of understanding signed by Prime Minister Pashinyan and U.S. President Trump on August 8 concerns energy security. Namely, the sides intend to promote investment to bolster Armenia’s critical energy infrastructure, including in “the development of battery energy storage stations for renewable energy resources.”

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