Solar projects worth a combined $2.7 billion are set to be launched in the Middle East and North Africa this year, a new study has shown.
According to the latest report by the Middle East Solar Industry Association (MESIA), solar projects having capacity to produce up to 1,800 megawatts(MW) of power are to be awarded or tendered over the next 12 months in the region.
The figure represents a six-fold increase from last year, which saw solar projects with a capacity of less than 300MW being awarded.
The report also noted a number of emerging trends in the MENA’s solar energy industry.
In 2015, solar is expected to be more pan-regional with MESIA estimating that projects will take off in 11 different countries across the region from Morocco to Saudi Arabia, compared to just one or two countries that were active in solar power generation last year.
The report also noted that the size of regional solar projects was increasing.
“In 2013, there were only three projects awarded larger than 10MW. This year, that number is expected to reach 40. Each of these projects will be worth at least $60 million and several will exceed $100 million,” the report said.
With the solar market poised to grow further, industry experts also see niche market segments such as rooftop solar picking up pace.
Some of the factors fuelling the growth of solar energy market are the falling costs of setting up solar energy plants and the rising costs of generating power through natural gas.
The price of solar systems has dropped by 75 per cent over the last six years, MESIA noted.
“It means that for the same budget as a 10 MW solar PV power plant in 2008, a plant five times larger can be built today without having to spend a penny more,” the report said.
Power generation through solar is still economically reasonable despite the falling oil prices, the report added.
“The cost of large scale solar PV is similar to the cost of generating power with oil at $20/barrel,” said Vahid Fotuhi, president of MESIA and director of origination at Access Power MEA.
“As long as oil remains above $20/barrel it is more economically attractive to use solar for electricity generation and keep oil for more valuable purposes such as transport fuels.”