Iran war is a renewable energy wake-up call

Two months into the war in Iran, energy markets are still in turmoil — and nowhere has felt the havoc more acutely than Asia.

Nearly 90% of the oil and gas transiting the Strait of Hormuz is bound for the region and the disruption is showing up directly in electricity bills, fuel costs, shortages and the creeping anxiety of energy insecurity.

In response, some countries have switched suppliers toward other oil and gas markets such as the United States. But let’s be honest, this strategy just swaps one fossil fuel import dependency for another. It does not eliminate the underlying price vulnerability given that we have global benchmark prices for oil and gas that closely track each other. It just relocates it.

The only short- and long-term answer is to rapidly deploy renewable energy like solar and battery storage, at scale and at speed — building reliable energy systems rooted in domestic generation instead of rollercoaster commodity markets.

New data out last week, from the global energy think tank Ember, shows new solar power investment met 75% of the net increase in global electricity demand in 2025. The growth in solar plus storage generation last year was sufficient to displace gas-fired electricity equivalent to all LNG exports through the Strait of Hormuz. The tool to address Asia’s vulnerability already exists and it is growing faster than any energy technology in history.

There is a clear-cut economic case for this. Solar PV prices have fallen 90% since 2010, making solar the cheapest source of new electricity in at least 80% of the world. It now requires less upfront capital than fossil fuel infrastructure. Rapidly falling battery storage costs mean deployment has grown 46% in the last year, creating a true baseload alternative when partnered with renewables. The era of fossil fuel dominance in the power sector is ending. The sun is rising on the dawn of a new solar era.

Japan itself has made real progress: Solar reached 10% of the country’s power generation in 2025, nearly tripling in a decade, and it is now the world’s fourth-largest solar generator. Solar is now cheaper than all other forms of energy — including Japan’s existing coal fleet. But the pace needs to accelerate, to deliver true energy security and keep Japan’s economy competitive well into the future.

Other countries facing similar pressures have moved even faster. After Russia invaded Ukraine in 2022, the Pakistani people pivoted to solar, and as a result, the country stopped building LNG plants. It is now the world’s sixth-largest solar market and that rapid deployment has cut its LNG import bill by $12 billion in recent years. The current crisis is prompting others to go faster: South Korea has committed to nearly trebling its renewable capacity in five years, Indonesia has announced huge new targets and demand for solar in the Philippines has spiked several-fold.

The old narrative — that traditional generation is the reliable foundation and renewables the aspirational supplement — has been proved wrong, repeatedly and expensively. The real choice is between locking in perpetual exposure to commodity markets controlled by distant powers or building domestically-owned, price-stable energy systems that keep wealth inside Asian economies. So what should governments like Japan do? Four things stand out.

First, accelerate domestic solar plus storage deployment with clear targets and grid investment. The technology is ready and the economics are compelling: The bottleneck is policy ambition and infrastructure.

Second, build regional grid interconnection across borders so surplus solar in one country can flow to neighbours in deficit. No single country needs total self-sufficiency. A connected regional grid reduces the cost of resilience for all and uses time zone differences to everyone’s advantage.

Third, redirect emergency subsidy spending — much of it currently temporarily curbing fossil fuel prices — toward solar and storage incentives. That is spending that pays back quickly and permanently, as Germany showed during the Ukraine crisis.

Fourth, invest in next-generation solar technology. Japan has world-class capabilities in research and materials science. Perovskite solar cells are an area where Japan, in collaboration with Australia and others, could help define the next decade of the global energy transition.

The energy that cannot be blockaded, embargoed or priced by a distant conflict is the energy generated at home. No geopolitical shock can interrupt sunlight falling on a rooftop in Osaka or a solar farm in Kyushu. The arguments for energy security — and the economics — have moved decisively in favour of domestic clean power.

Asia has the resources, the technology and the evidence. The war in the Middle East is a painful reminder of what dependence costs. The response should not be to find a different dependency — it should be to end the dependency altogether using power generated at home.

Sonia Dunlop is CEO of the Global Solar Council, a nonprofit international trade association for the solar and battery-storage industry. Takeaki Masukawa is secretary general of the Japan Photovoltaic Energy Association.