Solar energy becomes commercially viable in MENA

But a new report from the Emirates Solar Industries Association, sponsored by PwC, challenges this conventional wisdom. ESIA’s research, leady by author Robin Mills, indicates that solar electricity generation is now economically viable when fuel costs exceed $80 per barrel equivalent. With further improvements in technology and financing, this break-even price would fall below $60 per barrel, making solar competitive with new regional gas fields.

Key markets for solar power today are those which are:

importing oil for power (Jordan, Morocco)

burning large amounts of domestic oil for power (Saudi Arabia, Kuwait)

buying costly LNG (Dubai and Kuwait)

The advance of solar energy has important regional and global implications. "MENA countries have a new way to help meet their growing energy demand, and at the same time preserve oil and gas for future generations," says Vahid Fotuhi, Chairman of ESIA. Solar power can reduce carbon footprints, reduce local air pollution, and so improve health and global reputation. Solar power can also be an important source of local economic growth and job creation. "For every 1 megawatt of solar power installed, there are 10-15 jobs created across the entire value chain," Fotuhi added.

To make the most of this new advantage, MENA countries need new regulatory systems and policies to accommodate solar power. Solar needs a level playing field. Fuel and electricity pricing should be transparent, so that conventional oil and gas power do not receive hidden support.

Government and private sector must work together to create local companies and expertise in appropriate parts of the solar value chain. "Then solar power will be, not just another source of energy, but a driver of sustainable economic advantage through this century," says Paul Navratil, PwC’s Middle East Energy, Utilities, and Mining Leader.