Share

All set for a stellar year

2015 promises a huge expansion of solar, says MESIA's Vahid Fotuhi

Share
Vahid Fotuhi
Vahid Fotuhi

Last year was a breakthrough year for solar power in the Middle East. To put it in perspective, in the previous 7 years, only 70MW of solar projects were awarded across the region. In 2014 alone, that figure stood at 287MW, a four-fold increase, according to a new report published by the Middle East Solar Industry Association entitled MENA Solar Outlook, 2015.

This year, the industry’s growth will accelerate. We will also witness the emergence of three trends. First, we will see the solar PV systems become bigger in size. The typical project size in 2014 was 1-10MW. In 2015, we will see the average size balloon to 10-100MW. For example, in 2014 there was only 1 solar PV project awarded that was 50MW or larger.

In 2015, we expect that number to exceed 10. The reason behind this growth trend is pure-play economics. In the past, governments would build solar systems as either pilot projects, such as the QSTP test facility in Qatar, or trophy projects, such as the 2MW rooftop array at KAUST in Jeddah. Today, investors and utilities are looking to invest in solar power plants because of commercial reasons as much as anything else. Solar is now as commercially attractive as fossil fuel powered in several markets across the MENA region.

Take for example Egypt. As its natural gas infrastructure continues to age, it is becoming more expensive for it to generate power. So it has shifted its attention to exploring how it could take advantage of its abundant potential for solar and wind energy to meet its growing thirst for electricity.

Just last month the Ministry of Electricity under the leadership of Mohamed Shaker unveiled a landmark program which will see it introduce some 2,000MW of large-scale solar PV power projects, 300MW of rooftop solar power projects and 2,000MW of wind projects based on a universal pricing scheme that varied only based on the size of the system and whether it was wind or solar.

This will propel Egypt to the forefront of the region’s renewable energy market. Given that some 175 companies have submitted proposals for this program it means that the fundamentals (and the economic drivers) are in place.

Second, in 2015 the solar market in MENA will become more geographically diversified. In the past, most of the projects have been centered in the UAE. In 2015, there will be large-scale solar projects launched in ten different markets in the Middle East, a new record.

This diversity will become more exciting once Saudi Arabia truly enters the market. It has so far been held back from achieving its herculean solar potential due to the lack of political will. But in time they too will turn to solar in a big way, following the footsteps of Jordan and Egypt. This will no doubt herald a new wave of dramatic growth in our region’s emerging solar market.

Finally, we will see niche segments within the solar industry emerging. In the past, the typical profile of the companies was small local installers. But as the market continues to grow we will see more specialised companies. Aside from the traditional installers we will see system operators like SAT Engineering as well as specialised power project developers like Access Power MEA rise to the forefront.

Dubai’s recent launch of a grid-connected rooftop solar program will also foster the growth of rooftop installers. As a result, solar companies that had to endure razor thin margins in order to win projects now have the luxury to pick and choose which projects they go after.

2015 therefore promises to be a very exciting year for those of us in the solar industry in the MENA region as solar finally rises to its potential.

Vahid Fotuhi is the President of the Middle East Solar Industry Association (MESIA) and Director of Origination at Access Power MEA.

Newsletter

Most Popular