The Middle East, and the Gulf in particular, has been home to record low solar tariffs in recent years. Major projects are being awarded via tenders, with prices gradually closing in on a remarkable 1 USDct/kWh. Of course, this is no coincidence due to the region’s favorable solar conditions: availability of cheap and sunny desert land, low labor costs, cheap project financing, supportive tax regimes, large projects benefitting from economies of scale, well designed tender structures, and decreasing PV component prices.
Oil-dependent markets in the Middle East have a strong incentive to diversify their economies and have all set ambitious renewable energy goals. If they are to be realized, the region will have to deploy more than 50 GW of solar PV by 2030.
The development of PV has also been driven by public sector support. Even though the industry experienced a slowdown during the global Covid-19 pandemic, solar energy is once again at the heart of economic recovery efforts. Oil prices are now back at a higher level and supply chain issues are not as severe.
In this article, we profile the large PV markets in the Middle East that are expected to lead the region in solar PV deployment.
The UAE has been at the forefront of the clean energy transition in the Gulf region in terms of PV deployment and ambitious renewable targets. The Emirates aims to generate 50% of its electricity from carbon-free sources, driven mainly by solar PV, by 2050. Abu Dhabi, for instance, plans to install 5.6 GW of PV capacity by 2026 and Dubai aims to source 75% of its electricity generation from renewables by 2050.