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The Middle East & Africa solar photovoltaic (PV) market size was USD 2.19 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with solar photovoltaic installations witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a negative growth rate of -77.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 3.47 billion in 2021 to USD 22.68 billion in 2028 at a CAGR of 30.8% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Solar panels are the heart of any solar energy system. The photovoltaic cells are collaborated to form modules which are then mounted on frames in layers to form a solar panel. Photovoltaic produces clean energy 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 Investments and Extension in Timeline of Ongoing Projects Has Harmed Market Growth amid COVID-19 Pandemic
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 in the Middle East is expected to witness a downfall with an extension in delivery time for ongoing projects. As per the Arab Petroleum Investments Corporation (APICORP), energy investments in the MENA region are expected to fall by USD 73 billion between 2020 and 2024. Further, like other countries, the Middle East & Africa also witnessed a considerable shrink in solar energy installation volume as compared to the previous year.
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Renewable Energy Targets to Boost Investments in Solar Industry
To keep the carbon emissions from fossil fuels under control, countries in the Middle East region have set renewable energy, i.e., solar and wind energy targets, to achieve in 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, United Arab Emirates holds the maximum installations for solar PV. Furthermore, several projects are also in the pipeline for solar PV industry in the region.
The rapidly growing renewable deployment coupled with encouraging initiatives by the national administration such as FiT and net metering 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 photovoltaic.
Increasing Government Efforts to Maximize Energy from Solar is a Vital Trend
As the world shifts from fossil fuels to renewable energy sources, the same pattern has been witnessed in Middle East countries, with energy demand for renewables rising and governments focusing on harnessing the maximum possible energy from these sources. The government’s 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 UAE, as per the small-scale solar PV Energy Netting Regulation passed in Abu Dhabi 2017, owners of the solar photovoltaic 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.
Surging Adoption of Solar for Power Generation across Countries to Boost the Solar Photovoltaic Market
The adoption of solar power has been on the rise in the Middle East for over a decade. UAE, South Africa, and Egypt have been the front runner in increasing their solar power capacity over the years. Accordingly, the other countries 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.
The Ability of Solar PV to Be Cost-effective & Suffice Demand for Huge Population Will Drive Market
Solar parks and individual solar installations can suffice the power demand for a huge chunk of the population and an individual house, respectively. 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 market at a global level. This is expected to drive the solar power installations in the Middle East region in the upcoming years.
Installation Area Constraint and High Operation & Maintenance Cost May Hinder Industry Growth
The key restraint in the industry is the high capital investment and constant operation and maintenance, which further increases the cost. Also, the requirement of land for any large-scale solar project is in acres. Additionally, land selection also is constrained by many factors like the availability of solar radiation. It is difficult for solar PV operations to be deployed in built-up areas, forests, agricultural land, wetlands, and water bodies due to the low accessibility and instability of the land.
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Multicrystalline Silicon Segment to Dominate Backed by Long Operational Life
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 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 to improve the operational efficiency of other types, including monocrystalline and thin-film solar panels.
Large Scale Projects Will Lead to Domination of Ground-mounted Solar Installation Segment
Based on the installation, the market is segmented into ground-mounted, rooftop, and others. As the solar power market is still new in many of the countries in the region, the projects coming up are ground-mounted. The large solar parks in the region 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 covering the power need of a certain number of people in a building or apartment.
Increasing Grid Integrity Will Drive the Growth of the On-grid Segment
In terms of grid type, the market for Middle East and Africa solar photovoltaic (PV) is segmented into on-grid and off-grid. The on-grid segment has dominated the market as a large chunk of 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 Growth of Utility Segment
Based on application, the Middle East & Africa solar PV market is segmented into utilities, residential and non-residential. Countries are aiming towards 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 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 segment will also witness healthy growth.
The MEA solar PV market is being studied across various countries, which include U.A.E., South Africa, Egypt, Saudi Arabia, Iraq, Oman, Ghana, Namibia, Tunisia, Algeria, Nigeria, and the Rest of the 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 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 Middle East & Africa solar photovoltaic industry. 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 like Nigeria and Kenya have only 56.5% and 75% of the population with access to electricity respectively 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 industry depicts a market dominated by solar PV manufacturers, which hold a superior position in the global market. The players who have well-established supply chains with preference from customers have dominated the market in the Middle East too. Jetion Solar, Seraphim Solar, and Asumin solar are the companies that hold a dominant position in the Middle East market. As the companies coming up in the region are new and are working towards expanding their reach, this industry is expected to be having numerous players in the upcoming years, which will further profit the whole solar PV industry in the Middle East & Africa.
An Infographic Representation of Middle East & Africa Solar Photovoltaic (PV) Market
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The Middle East & Africa solar photovoltaic (PV) market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and upcoming product developments. Besides this, it offers insights into the Middle East and Africa solar PV industry 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 over recent years.
Value (USD Billion) and Volume (MW)
By Technology; By Installation; By Grid Type; By Application; and By Country
By Grid Type
Fortune Business Insights says that the market size was USD 2.19 billion in 2020.
The MEA market is projected to reach USD 22.68 billion in 2028.
Registering a CAGR of 30.8%, the market will exhibit healthy growth in the forecast period (2021-2028).
The multicrystalline silicon segment is expected to lead this market during the forecast period.
The increasing investment in solar power would drive the market. However, the high capital cost may restrain growth in the forecast period.
The market in the Middle East & Africa region stood at USD 2.19 billion in 2020.
Jetion Solar and Asumin Solar are the top companies in the market.
The deployment of solar PV directly results in solar parks harnessing more energy and, therefore, a more efficient solar energy system.
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