Renewables Market in MENA

mena-renewablesMENA region has an attractive market for renewables due to abundant availability of solar and wind resources. According to a recent IRENA report, the region is anticipating renewable energy investment of $35 billion per year by 2020. Recently, the MENA region has received some of the lowest renewable energy prices awarded globally for solar PV and wind energy.

Regional Developments

Among MENA countries, Morocco has emerged as a role model for the entire region. The government’s target of 2GW of solar and 2GW of wind power by 2020 is progressing smoothly with the commissioning of Nour-1 Solar project. Jordan and Egypt are also making steady progress in renewable energy sector.

As far as GCC is concerned, the UAE has also shown serious commitment to develop solar energy. The 100MW Shams CSP plant has been operational since 2014 in Abu Dhabi while 13MW Phase I of Dubai’s solar park was completed in 2013. In Saudi Arabia, the newly launched Vision 2030 document has put forward a strong regulatory and investment framework to develop Saudi clean energy sector which should catalyse renewable energy development in the country.

Renewables – A boon for MENA

Renewable energy has multiple advantages for MENA in the form of energy security, improved air quality, reduced GHG emissions, employment opportunities, apart from augmenting water and food security.

The business case for renewable energy proliferation in MENA is strengthened by plentiful availability of natural energy resources and tumbling solar PV technology costs which are leading to record low renewable power generation costs. The recent auction for the Mohammed Bin Rashid Al Maktoum Solar Park 2 in Dubai yielded prices as low as 5.85 US cents per kWh which is one of the lowest worldwide.

Impact of Falling Costs

The falling costs will have a significant positive impact in the developing world where tens of millions of people still lack access to cheap and reliable supply of energy. Reducing costs will help MENA, especially GCC, to meet its target of steady transition towards renewable energy and thus reducing dependence on fossil fuels for power generation and seawater desalination.

The slump in renewable energy tariffs will also encourage utility companies in emerging markets to include more renewable energy in transmission and meet the targets set by respective countries. However, it should also be noted that there have been several instances where the actual renewable energy production failed to take place because of low bids.

Emerging Trends

Off-grid renewable energy technologies have tremendous potential to popularize clean energy among remote and marginalized communities across the world. Access to clean, reliable and relatively cheap energy from renewable resources, especially solar power, will usher in a new era in developing countries. Off-grid (or standalone) renewable power systems are already making a meaningful difference in the lives of millions of people across the developing world.

In recent years, Morocco has made remarkably swift progress in renewable energy sector.

In recent years, Morocco has made remarkably swift progress in renewable energy sector.

Advancements in battery energy storage have pushed this particular sector into media as well as public spotlight. With big industry names like Tesla and Nissan leading from the front, energy storage technologies are expected to make great contribution in transition to green grid powered by intermittent energy sources like solar PV, CSP, wind and biomass.

Concentrated solar power (CSP) has the potential to transform seawater desalination industry, one of the largest energy consumers in the Middle East. CSP offers an attractive option to power industrial-scale desalination plants that require both high temperature fluids and electricity.  CSP can provide stable energy supply for continuous operation of desalination plants, based on thermal or membrane processes. Leading CSP technology companies are already taking a keen interest in Middle East CSP market and rapid developments are expected in the coming years.

Key Hurdles to Overcome

Lack of strong regulatory framework, low renewable energy tariffs and weak off-take mechanisms are some of the issues confronting renewable energy projects in MENA. Regulatory framework in the GCC is in early stages and marred by heavy subsidy for oil and gas. The largest barrier to growth of solar sector in MENA has been the lack of renewable energy policy framework, legislations, institutional support, feed-in-tariffs and grid access.

The power sector in MENA is, by and large, dominated by state utilities which discourage entrepreneurs and Independent Power Producers (IPPs) to enter the local markets. Lack of open and transparent market conditions in MENA are acting as deterrent for investors, technology companies and project developers.

Among regional countries, Jordan and Morocco have the most advanced legal infrastructure in place to support renewable energy projects, followed by Saudi Arabia and the UAE.

Tips for New Entrants

MENA solar market is complex due to different electricity market structure and myriad challenges in each country. Different countries have different motivations for renewable energy. Solar companies who want to foray in MENA market must give special attention to land access, grid access, transparent licensing schemes, high-quality meteorological data, creditworthy customers, long-term off-take contracts, soiling of PV panels and related issues.

Clean Energy Investment Forecast for 2016

renewables-investment-trendsGlobal interest in clean energy technologies reached new heights last year and 2016 promises to be another record-breaker. The year 2015 witnessed installation of more than 121 GW of renewable power plants, a remarkable increase of 30% when compared to 2014. With oil and gas prices tumbling out to unprecedented levels, 2016 should be a landmark year for all clean energy technologies. As per industry trends, solar power is expected to be the fastest-growing renewable power generation technology in 2016, closely followed by wind energy. Among investment hotspots, Asia, Africa and the Middle East will be closely watched this year.

Investment Forecast for 2016

Clean energy is rapidly becoming a part of mainstream investment portfolios all over the world. In 2016, a greater attention will be focused on renewable energy, mainly on account of the Paris Framework and attractive tax credits for clean energy investments in several countries, especially USA.

Infact, the increasing viability of clean energy is emerging as a game-changer for large-scale investors. The falling prices of renewable power (almost 10% per year for solar), coupled with slump in crude oil prices, is pulling global investors away from fossil fuel industry. At the 2016 UN Investor Summit on Climate Risk, former US vice president Al Gore said, “If this curve continues, then its price is going to fall “significantly below the price of electricity from burning any kind of fossil fuel in a few short years”.

There has been an astonishing growth in renewable generation in recent years. “A dozen years ago, the best predictors in the world told us that the solar energy market would grow by 2010 at the incredible rate of 1 GW per year,” said Gore. “By the time 2010 came around, they exceeded that by 17 times over. Last year, it was exceeded by 58 times over. This year, it’s on track to be exceeded by 68 times over. That’s an exponential curve.”

China will continue to dominate solar as well as wind energy sectors

China will continue to dominate solar as well as wind energy sectors

As per industry forecasts, China will continue its dominance of world PV market, followed closely by the US and Japan. Infact, USA is anticipated to overtake Japan as the second largest solar market this year. India, which is developing a highly ambitious solar program, will be a dark horse for cleantech investors. The top solar companies to watch include First Solar, Suntech, Canadian Solar, Trina Solar, Yingli Solar, Sharp Solar and Jinko Solar.

Morocco has swiftly become a role model for the entire MENA. The government’s target of 2GW of solar and 2GW of wind power by 2020 is progressing smoothly. As for solar, the 160MW Noor-1 CSP is already commissioned while Noor-2 and Noor-3 are expected to add a combined 350MW in 2017.

China will continue to lead the global wind energy market in 2016, and is on course to achieve its target of 200 GW of installed wind capacity by 2020. Other countries of interest in the wind sector will be Canada, Mexico, Brazil and South Africa. The major wind turbine manufacturers to watch are Siemens, Vestas, Goldwind, Gamesa and GE.

Conclusion

To sum up, the rapid growth of global renewable energy sector in the past few years is the strongest signal yet for investors and corporations to take the plunge towards green energy and low-carbon growth. As the UN chief Ban Ki-moon famously said, “It marks the beginning of the end of growth built solely on fossil fuel consumption. The once unthinkable has now become unstoppable.”

ROI of Commercial Solar Panels for Business Owners

The way business owners think about solar panels has changed. Less than ten years ago, businesses were concerned about whether solar power would provide them with the energy they need. Now, that question is almost never asked, because it’s been answered. Two of the biggest companies in the world, Google and Walmart, have installed dozens of solar plants at their headquarters. Solar energy has been shown to work well for big business.

Now small businesses want to know how solar panels can provide them with a strong ROI.

It’s said money doesn’t grow on trees, but in the case of solar panels, it does fall from the sky.

Commercial Solar Panels Decrease Energy Costs

Solar panels cut down on the amount of energy you pay for, because all day every day, you’re producing your own.

There is a common misconception that solar panels only work when the sun is blaring but this isn’t the case. Even on an average day in the depths of a British Winter, solar panels produce enough energy.

When you generate your own solar power, you only have to switch to the National Grid at night. With most small businesses using less power at night, this can offer huge savings.

More than that, small business owners protect themselves from losses due to energy price increases. As the cost of using the National Grid rises, solar panels save a small business owner more and more money.

Generate a Passive Income

Feed-in-tariffs (FIT) offer a big ROI for business owners who want to install solar panels. FIT is a government scheme which intends to encourage people to adopt low-carbon and renewable energy technologies, by paying them to do so.

Under FIT, every unit of energy your solar PV system generates is paid for whether you use that energy or not, and you’re paid for any energy your system produces that goes back into the national grid.

This allows small business owners to generate a passive income for twenty years, guaranteed by the UK government. As if it couldn’t get any better, all the money earned under FIT is completely tax free.

The Cost of Installation Has Decreased

Many small business owners were reluctant to switch to solar panels because of the high initial outlay. Since the launch of the FIT scheme, the cost of installation has decreased dramatically, which means business owners will see their solar panels generate returns faster now than at any other point.

There are plenty of subsidies available to those who are looking to install commercial solar panels, because the government wants renewable energy to work for individuals and businesses. This also means the return on investment for solar panel technologies is at a high.

Helping the Environment Helps Your Business

If businesses are looking for sustainable and long-term growth, thinking conscientiously about the environment is crucial. With global temperatures rising, the rising costs of food and energy are going to have a massive impact on how consumers spend their money.

Solar panels have low maintenance cost

Switching to sustainable energy now has a positive impact on the ecosystem, which protects the pockets of consumers of your products for years to come. Decreased outgoings for energy means greater savings, and a show of environmental care can increase your prestige in a crowded market.

The Return on Investment

Solar panels cost very little to maintain once they’re installed, and can last up to thirty years. The estimated savings for residential properties over a twenty-year period is around £9,000, and for commercial properties that figure extends even higher; a small business can look to save £16,000.

No planning permission is required for businesses to install solar panels, saving you time which can save you money. Low installation costs, a decrease in energy outgoings and the generation of a passive income means the ROI of solar panels is higher now than at any other point. Solar energy works wonders for your business and the planet.