Power policy

The Ministry of Energy, in partnership with the International Finance Corporation (IFC) through its Scaling Solar initiative, rolled out its first clean energy auction in October 2019 for a 100-megawatt solar project in the Navoiy region. In May 2020, the Ministry of Energy announced a goal to source 25% of power from renewables by 2030, which would require an estimated 5 gigawatts of solar and 3 gigawatts of wind.

Uzbekistan replaced its 2008 Tax Code with a new Tax Code, which took effect in 2020. As outlined in the Tax Code, taxpayers can apply for an “investment deduction”, in the form of accelerated depreciation, for their assets.

Uzbekistan’s Senate in 2019 also approved a law that provides a 10-year property tax exemption (after commissioning) for renewable energy producers and a five-year valued-added tax (VAT) exemption for renewable energy installers and manufacturers of equipment that sell power to JSC National Electric Networks of Uzbekistan, the state utility formed in April 2019.

Off-grid projects will be granted property tax exemptions for three years after commissioning. These exemptions are eligible for all projects greater than 0.1 megawatt in size and no sectors are specified. For producers of electricity and heat from biogas or biomass sources, permit requirements have also been waived.

In September 2019, the Ministry of Energy introduced further provisions for onsite solar. Homeowners are granted a 30% rebate for residential solar photovoltaic (PV) systems. Homeowners using rooftop PV systems will also be compensated to cover the interest from any loans taken out from commercial banks to purchase the arrays. The standard VAT rate in Uzbekistan is 15%.

Power prices and costs

In May 2020, the government approved differentiated electricity tariffs for residential users by time and weekdays/weekends, which took effect in 2022. The commercial tariff has increased 22% since 2019 and the residential tariff has only risen 7%.

Stable and reliable electricity has been the priority for Uzbekistan's distribution utility, JSC regional Power Grids, and its predecessor, Uzbekenergo. The country does not have a sufficiently mature metering system to offer customer time-of-use electricity tariffs but is currently working to implement one.

Power market

In May 2019, Uzbekistan’s electricity grid and national utility JSC Uzbekenergo were split into three independent joint-stock companies. JSC Thermal Power Plants manages and develops the country’s coal, gas and large hydro projects, but the generation segment of Uzbekistan’s power market is partially liberalized and private-sector players are free to build renewable projects. The country’s transmission and distribution segments are managed by JSC National Electric Networks and JSC Regional Electric Networks, respectively, and neither is privatized. As of October 2022, coal and gas make up 87% of the country’s generation mix.

Doing business and barriers

Uzbekistan does not have any interconnected utility-scale clean energy projects yet, meaning that it is unclear what are the risks associated with clean energy development in the country. Companies participating in the country’s clean energy auctions should be conscious of the challenges related to working with a utility integrating solar and wind power into Uzbekistan’s grid for the first time.

EV market

Uzbekistan lacks a clean transport target, although it is quickly ramping up its nascent electric vehicle (EV) market. Imports of EVs rose from just 13 in 2018 to more than 130 in 2020. In the first quarter of 2021, these imports increased to 138 units. In January 2021, President Shavkat Mirziyoyev announced that the country should aim to produce 50,000-60,000 EVs down the line, but that is likely little more than an aspiration given the lack of a domestic EV industry.

EV policy

In May 2021, the Ministry of Finance discussed the possibility of amending its tax code to exempt electric car imports from import taxes (there is no similar amendment for income taxes under discussion), although this is not yet official legislation. That would mean companies importing EVs would only be subject to the 15% VAT, making it cheaper to bring these vehicles into the country. The government also mandated that state-owned automaker Uzavtosanoat start producing EVs domestically, although no target date has been set for such production.

Buildings market

In May 2020, Uzbekistan outlined plans to expand its clean energy targets beyond its initial 2025 goals. In a concept note published by the Ministry of Energy, the country discusses a targeted program for the installation of solar water heaters in 2-2.5% of households by 2025, although nothing has been put into law.

Buildings policy

Uzbekistan has not disclosed any energy efficiency or energy performance policies for its buildings, outside of its broader aspirational target.