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The Middle East & Africa solar photovoltaic (PV) market size was valued at USD 5.00 billion in 2022. The market is projected to grow from USD 6.93 billion in 2023 to USD 37.71 billion by 2030, exhibiting a CAGR of 27.4% during the forecast period.
Solar panels form the heart of any solar energy system. Photovoltaic cells are collaborated to form modules, which are then mounted on frames in layers to form a solar panel. Solar photovoltaic (PV) power systems work by converting sunlight directly into electricity using semiconducting materials. In the photovoltaic cells, the photovoltaic effect takes place when exposed to sunlight which results in the generation of voltage or current. Different kinds of solar modules can be manufactured using solar cells. Variable shapes and sizes can be manufactured based on the required output and installation type. These can be used in any type of solar installation, for example, ground-mounted and rooftop installations. In the current solar energy industry monocrystalline silicon, thin-film and polycrystalline silicon are the most used material for solar cell manufacture.
Fall in the Number of Investments and Extension in Timeline of Ongoing Solar Projects Harmed Solar Photovoltaic (PV) Market Growth
The global health emergency caused by the spread of the COVID-19 had led to a negative impact on every industry. The solar energy industry in the Middle East region is heavily dependent on imports from other countries and also technical workforce which mainly comes from EPC contractors. With the national lockdowns and unavailability of laborers, the investment trend for solar technology in the Middle East is expected to witness a downfall with an extension in delivery time for ongoing solar projects. As per the Arab Petroleum Investments Corporation (APICORP), the energy investments in the MENA region as expected fell by USD 73 billion between 2020 and 2024. Further, like other countries, the Middle Eastern countries also witnessed a considerable shrink in solar energy installation volume as compared to the previous year.
Renewable Energy Targets to Boost Investments in Solar Industry
To keep the carbon emissions from fossil fuels under control, countries in the Middle East have set renewable energy targets to achieve in the coming years. Also, the energy demand in the region has increased over the years. Solar energy is the major focus of many countries as the region is blessed with sunlight for a major portion of the year. Amongst all the countries in the Middle East region, the United Arab Emirates holds the maximum installations and PV projects in the pipeline for solar PV installation. Rapidly growing renewable deployment coupled with encouraging initiatives by the national administration is set to boost the setup of new solar units in the country. The solar energy capacity in the country is expected to be fourfold by the end of 2025 as compared to the current installed capacity. In 2020 renewable energy capacity of the country stood at 2.3 GW. Out of this renewable energy, approximately 91% of the installations were of solar PV.
Increasing Government Efforts to Maximize Solar Energy will Propel Industry Growth
As the world shifts from fossil fuels to renewable energy sources, the same pattern has been witnessed in the Middle East countries with energy demand for renewables rising and governments focusing on harnessing maximum possible energy from these sources. The governments in the region are focusing on promoting solar at the individual level and are also rolling out plans to provide incentives and benefits to people to reduce the use of fossil fuels. For example, in the UAE as per the small-scale solar PV Energy Netting Regulation passed in Abu Dhabi 2017, owners of solar PV panels are obliged to be credited for any surplus production beyond usage in their premises. The regulation applies to owners, producers, distribution companies, licensed contractors, or any other person who is involved in the connection of small-scale PV systems to the distribution network or distribution companies.
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Growing Adoption of Solar for Power Generation across Countries to Boost the Solar Photovoltaic Market Share
The adoption of solar power has been on a rise in the Middle East for over a decade. The UAE, South Africa, and Egypt have been the front runner in increasing their solar power capacity over the years. Accordingly, the other countries present in the region have also rolled out plans to invest heavily in solar. For example, in Algeria, the government has set a goal of producing 22 GW of power from renewable resources by the end of 2030. Out of the given 22 GW, more than 13 GW is expected to be produced using solar PV. Saudi Arabia recently made amendments to its initial plans announced in 2016, according to the revised targets the country aims to increase its renewables target from 9.5GW to 27.3 by the end of 2023 (including 20GW of PV and 7GW of wind), and the country further increased its 2030 target to 58.7GW in 2030 (40GW of PV, 16GW of wind, and 2.7GW of concentrating solar power).
Ability of Solar PV to be Cost-effective and Suffice Demand from Huge Population will Drive the Market
Solar parks and individual solar installations can suffice the power demand from a huge chunk of the population and individual houses. Solar installations decrease the price of electricity per unit. Incentives provided by the government over solar power production are the major factor that attracts users to install solar at an individual level. Along with no carbon emissions, this is one of the major reasons that has led to the growth of the Middle East & Africa solar photovoltaic market share at a global level. This is expected to drive the solar power installations in the Middle East in the coming years.
Installation Area Constraint and High Operation & Maintenance Cost May Hinder the Industry Pace
The key restraints for the Middle East & Africa solar photovoltaic market growth are expected to be high capital investment and constant operation & maintenance, which further increase the cost. Also, for utility-scale solar power generation PV projects, a huge piece of land is needed for efficient power generation. The selection of land for solar power generation can be constrained by environmental or technical reasons in many areas such as the availability of solar radiation. Deployment of a solar system in large areas can have significant impacts on natural areas and biodiversity due to the large extent of land occupied by the power plants. For example, it is difficult for solar PV operations to be deployed in built-up areas, agricultural land, forest, wetlands, and water bodies due to low accessibility and instability of the land.
Multicrystalline Silicon Segment will Drive the Market with Operational Advantages
Based on technology, the market is segmented into monocrystalline silicon, thin film, multicrystalline silicon, and others. Amongst all the available technologies, multicrystalline silicon solar panels hold the maximum efficiency. Long operational life is the other major factor that has been driving their adoption over the years. Research and development activities are being carried out at different levels for improving the operational efficiency of other types which include monocrystalline and thin-film solar panels.
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Large Scale Solar Projects Will Lead to Domination of Ground Mounted Solar Installations
Based on installation, the market segmented into ground mounted, rooftop, and others. As the solar photovoltaic (PV) market is still new in many countries in the region, the solar projects coming up are ground-mounted. The large solar parks in the region such as Mohammed Bin Rashid Al Maktoum Solar Park are aimed at producing huge power and therefore, are using ground-mounted installation in large open spaces. The rooftop installation is majorly done in case of individual installation or an installation for the need of a certain number of people in a building or apartment.
Increasing Grid Integrity will Drive the Growth of On-Grid Segment
In terms of grid type, the market is segmented into on-grid and off-grid. The on-grid segment has dominated the market as a large chunk of PV projects currently being carried out or in operation are directly connected to grid supply which manages the power demand for numerous customers. With the growing penetration of solar, rooftop installations are expected to rise which will also drive the growth of the off-grid segment.
Increasing Share of Renewable in Overall Power Mix Will Drive the Growth of Utility Segment
Based on application, the market is segmented into utility, residential, and non-residential. Countries are aiming toward increasing the share of renewables in the overall power mix, which drives the adoption of solar as a central resource and therefore directly relates it to central utilities. Further, as most of the solar parks in the region such as Mohammed Bin Rashid Al Maktoum solar park are located in large areas and require proper transmission and distribution lines which are already present with central utilities. These factors will drive the growth of the utility segment. The rising adoption of the solar residential and non-residential segments will also witness healthy growth.
The Middle East & Africa solar photovoltaic market is being studied across various countries, which include the UAE, South Africa, Egypt, Saudi Arabia, Iraq, Oman, Ghana, Namibia, Tunisia, Algeria, Nigeria, and the Rest of Middle East & Africa.
Currently, the United Arab Emirates (UAE), South Africa, Algeria, and Egypt are the countries in the region that have witnessed a boost in solar power PV projects over the years. Substantial funding by various companies to construct new solar projects to continuously supply power to different commercial and industrial sectors is set to transform the electricity generation technology mix in the region.
For example, in January 2020, the Kingdom of Saudi Arabia released tenders to invite companies for the contracting of 1.2 GW solar generation capacities under the third round for procurement of its National Renewable Energy Program, Renewable Energy Project Development Office (REPDO). Furthermore, significant plans to maintain energy security and power remote locations with high-efficiency generation technologies are likely to complement the regional outlook. Besides, many areas across the territory are still unable to receive an ample electricity supply generating a huge untapped potential for easy integration of solar and other renewable technologies.
As per the data updated by the World Bank in July 2020, even significantly economically contributing countries, such as Nigeria and Kenya, had only 56.5% and 75% of the population with access to electricity in 2018. The information thereby denotes a huge possible extent to install new technologies for energy generation to compensate for the gap.
Increasing Scope of Deployment with Government Backing will Lead to Competitive Market
The competitive landscape of this market depicts a market share dominated by solar photovoltaic manufacturers which hold a superior position in the global market. The competitive landscape which has well-established supply chains with preference from customers dominated the market in the Middle East too. Jetion Solar, Seraphim Solar, and Asumin solar are the key players that hold a dominant position in the Middle East market. As the key players coming up in the region are new and are working toward expanding their reach in the coming years, it will further profit this market.
The research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and upcoming developments of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
An Infographic Representation of Middle East & Africa Solar Photovoltaic (PV) Market
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CAGR of 27.4% from 2023 to 2030
Value (USD Billion), Volume (MW)
By Technology, Installation, Grid Type, Application, and Region
By Grid Type
Fortune Business Insights says that the market size for Middle East & Africa was USD 5.0 billion in 2022.
The market for Middle East & Africa is projected to reach USD 37.71 billion in 2030.
Registering a CAGR of 27.4%, the market will exhibit healthy growth in the forecast period (2023-2030).
The multicrystalline silicon segment is expected to lead this market during the forecast period.
Increasing investment in solar power would drive the market. However, the high capital cost may restrain market growth in the forecast period.
Jetion Solar and Asumin Solar are the top companies in the market.
The deployment of a solar photovoltaic (PV) directly results in solar parks harnessing more energy and therefore more efficient solar energy system.
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