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The Future Shines Bright

Renewable energy has been growing significantly over the past 12 months. This trend will continue to increase as solar power prices reach grid parity. In 2019, the global estimated additions of solar photovoltaic (PV) reached almost 133 GW. Within the Middle East and North Africa (MENA) region, the increased industrial activity and drive towards renewables is reflected in each country’s strategy.

Continuous population growth and economic development has placed pressure on existing power assets and in some cases, created a significant gap between electricity production and demand. Affordable renewable energies in the region – mainly solar – have become an obvious solution.

As renewable energy increases, grid capacity and stability challenges underline the importance of adequate storage solutions. CSP, PV and storage solutions are starting to enter the MENA region as seen in Morocco and the UAE supported by declining prices.

The total corporate funding in the global solar sector saw an 11% increase year-on-year at $109.4 billion in the first half of 2019. More than $2.6 trillion has been invested in renewable energy over the past decade.

Global solar power capacity increased by more than 25 times in this decade, from 25 GW at the beginning of 2010 to 617.9 GW anticipated by the end of 2019. Overall investment in the MENA energy sector could reach $1 trillion between 2019 and 2023, with the power sector accounting for the largest share of the spending at 36%.

As the unit rate for solar energy investment is reducing year-on-year, a decrease in capital does not represent a slowdown in the industry. Instead, this indicates the price decline in renewable energy technologies as the amount of gigawatts installs remain high.


Investment in commercial scale solar development in the MENA region faces a number of challenges but also opportunities.

Though challenges vary in each market, the main issues include:

Grid Parity 

when renewables are competing with heavily subsidized fossil fuel generation assets.

Policy and Legislation

most markets require government support to encourage the adoption of solar energy. In addition to setting high renewable energy targets, stable tariff regimes, clear permitting rules, net metering, wheeling and grid connection conditions are required. Incentives, such as rebates to switch to solar energy, may play an important role in some countries.

An example of this can be seen in the UAE as Dubai’s regulatory framework has helped reduce costs, increased project design optimizations and provided a bankable procurement process. At global level, IRENA’s work on project standardization aims to foster such approach.


in some markets, solar is still a relatively new concept so educational and informational campaigns are needed.


there is a shortage of required skills to meet the demand. Partnerships and collaboration with high schools, trade schools and universities are growing. The industry can play a major role in supporting the development of training and fostering local talent which will play a key role to increase the solar industry throughout the region.


as the region’s renewable energy market matures, lenders use progressive financing mechanisms, such as soft short-term loans which can encourage developers to refinance after a set time, to lower lending costs.

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