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Solar Growth in Africa and MENA

, May 6, 2014, 0 Comments

Solar Growth-MarketExpressThe Africa and MENA region will show the highest solar growth in the next 5 years, with SolarBuzz predicting a 50% CAGR in the next 5 years. The region saw a stupendous 670% growth in 2013, albeit on a low base. This 140 MW is set to increase in an exponential fashion as sharply lower panel prices makes solar highly competitive, especially in the MENA region which gets a huge amount of solar insolation.

Solar growth drivers in Africa

The main drivers for growth of solar energy in Africa is:

1) Low levels of electricity penetration with most people lacking grid access. It is cheaper to provide them distributed solar energy rather than laying expensive electricity grid lines.

2) Fuel is expensive and scarce in a lot of regions. It makes sense to install solar panels rather than build expensive fossil fuel plants.

Solar growth drivers in Middle East and North Africa

The main drivers of growth in the Middle East and North Africa region are:

a) Most countries are completely dependent on oil and gas for electricity. These are quite expensive, especially oil based electricity. It makes a great amount of sense to substitute oil with renewable energy and sell oil to other countries for use in transport.

b) Growing population means that the electricity needs are rising very quickly. These countries do not have access to coal (at least not domestically). While some of them have ambitious nuclear energy programs, nuclear plants take a very long time to build and their costs have become quite high. Renewable energy is the only choice.

c) Solar Energy leads the pack, given the most NA and ME countries have very high solar radiations. These decreases the LCOE for solar energy and makes it more attractive than wind and biomass energy.

The governments in this region have quickly realized that renewable energy is the best choice for future growth. Saudi Arabia has set a very ambitious solar energy target of 32 GW by 2030, while others have also set up big solar energy targets.

South Africa has already completed two rounds of renewable energy auctions and will soon become the first gigawatt market in Africa. Israel has also moved ahead with both solar PV and solar CSP programs. The country is set to become the largest solar market, thanks to its tremendous technology strengths and government support. Saudi Arabia the largest ME country in terms of size, is also going to make a big move in solar capacity additions. The country has a massive amount of reserves and can easily make a big investment in the future by deploying large amounts of solar power.

Solar photovoltaic (PV) demand from the Middle East and Africa (MEA) region is set to grow 50 percent year-over-year in 2014. Between 2014 and 2018, annual PV demand will nearly triple as the MEA region becomes a key market for the global industry. By 2018, annual PV demand in the MEA region is expected to reach 4.4 GW, with an upside potential of 10 GW.

MEA Annual PV Demand Forecast

Emerging PV Markets Report: Middle East and Africa:
Saudi Arabia’s ambitious renewables program will finally start to materialize this year, making it the largest PV market in the MEA region by 2016. Saudi Arabia is forecast to add 2.4 GW of new PV capacity between 2016 and 2018. Other key solar PV markets in the Middle East include the United Arab Emirates, Jordan, and Kuwait.