GTM Research believes that the overall regional outlook is at more than 10 GW through 2017. However, the majority of this demand will be established by 2015 when many projects throughout the region see commercial operation.
GTM Research's report states that Saudi Arabia and Turkey will have the highest demand, with Saudi Arabia looking to be the region's first gigawatt-scale market by 2015. Nearly 70% of the demand is expected to come from Saudi Arabia and its K.A. CARE program and secondly, Turkey.
GTM Research also predicts that many other countries like Algeria and Morocco will see significant demand between 2018 and 2020. Algeria and Kuwait have been highlighted as countries that have the makings of a significant demand market in the future, provided they establish a stronger regulatory framework for solar power and renewable energies.
Market attractiveness
In GTM Research's "Regional market attractiveness comparative matrix" Saudi Arabia and Turkey hold the first two positions with scores of 4.1 and 3.9 respectively on a scale of 5, followed by:
- Abu Dhabi – 3.6
- Morocco – 3.6
- Jordan – 3.2
- Dubai – 3.1
- Algeria – 3
- Egypt – 3
- Qatar – 2.4
- Kuwait – 2.2
- Oman – 2.2
- Bahrain – 1.3
The matrix was compiled based on scale of tender driven market, scale of FIT or electricity offset market, scale of PV and CSP demand, retail electricity rates, non-domestic company receptivity, strength of solar-related policies, near-term market potential (2017), and long-term market potential (2030).
Drivers
With solar demand moving away from the traditional European markets, factors such as electricity needs, insolation and grid prices are increasing demand in the MENA region.
Even though countries like Saudi Arabia, Algeria and Qatar for example are oil rich countries, these countries are incentivized to invest in solar power to preserve their own hydrocarbon resources and to lower generation costs. Oil importing countries like Turkey, Morocco and Egypt for example are investing to decrease their fuel import costs and to increase energy independence.
GTM Research states in its report that the MENA region is set to experience significant change over the next five years and significant investment opportunities will arise. For many MENA countries, energy diversification is a necessity and this will drive the solar sector. A new energy era wave is set to ripple across the region as the report concludes.
In-depth analysis of the different countries and more forecasts can be found in the 103-page solar market report, Middle East and North Africa (MENA) Solar Market Outlook, 2013-2017.
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