Hidden Economic Risks in Kazakhstan's Solar Transition

Published paper, presented at the IEEE International Near East Conference on Electrical and Energy Systems (NEECON) 2026, Dubai, 23 October 2026. This is the author's accepted manuscript. Kazakhstan expands its solar power through reverse auctions, yet these auctions only consider the lowest tariff for a project, rather than weighing where the money is transferred. Hence, there is a hidden economic risk, where much of a project's value can flow out of the country and the host region. Electricity consumers fund these plants for 20 years, and 6.8 GW of renewable capacity is planned through auctions by 2027. This paper makes this hidden risk visible by using Kazakhstan's 2023 national input-output accounts. Each dollar spent on building a solar plant is traced to domestic value added or to imports, for the country and for its 20 regions. This study finds that about 57% of each solar capital expenditure (CAPEX) dollar is withdrawn from the country's economy through imports (90% band 53–60%). This is primarily concentrated in solar panel modules and inverters. For each GW of solar, about $450M is paid to foreign producers. Further, this paper finds that, under alternative import-share definitions, the share stays between 57% and 63%. The impact is clear: if half of work is given to foreign producers, a project of the same tariff receives $127k less per MW in the country. Point estimates are lowest in the oil-producing western oblasts, yet the uncertainty bands are too wide to rank individual regions. Overall, the lowest tariff does not necessarily identify the project that leaves the most value in the country.