With 12 GW pipeline, PV markets in Middle East, Africa show strong growth potential

The PV market in the Middle East and Africa (MEA) is set for strong growth, with many multi-megawatt ground-mounted projects in the planning or pre-planning phases, according to a new report by NPD Solarbuzz.

Current PV projects in Africa have a total potential capacity of more than 11 GW and projects in the Middle East amount to a total potential capacity of at least 1.3 GW, NPS Solarbuzz reports in its Middle East and Africa Deal Tracker – Solar Project Database, which covers completed and in-progress solar projects in 29 African countries and seven Middle Eastern countries.

"Until now, PV market growth in the MEA region has been mainly driven by a small number of economically prosperous countries, in particular South Africa and Israel," says NPD Solarbuzz analyst Susanne von Aichberger. "These two countries, and Saudi Arabia, are expected to offer stable demand levels within the MEA region over the next few years. The capacity share of the remaining MEA region is projected to increase; however, the increase depends on relatively few, but very large, projects."

More than 99% of the potential PV capacity listed in the Middle East and Africa Deal Tracker is from ground-mounted projects. In Africa, the average size of projects tends to be larger than in most established PV markets. "Economy of scale tends to raise the attractiveness of large projects, but the large size of ground-mount solar parks also increases risk, particularly in countries with previously little or no existing PV markets," von Aichberger says.

While the pipeline is extensive and spread all over the continent, the majority of Africa’s existing PV capacity is located in South Africa. Completed South African projects comprise nearly 700 MW, according to the report, while identified installations in the rest of Africa amount to one-tenth of this capacity. Only 7% of identified African project capacity has been completed, according to the study.

Projects of 50 MW or greater were recently announced in Algeria, Cameroon, Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Swaziland, Tunisia, Uganda, Zambia and Zimbabwe, with the largest pipelines in Kenya and Zimbabwe. Outside of South Africa, multi-megawatt projects have been completed in Benin, Cap Verde, Mauritania, Senegal and Uganda.

"The fundamental market driver in Africa remains the basic need for energy, especially in sub-Saharan Africa," von Aichberger adds. "However, demand is also being driven by project developers that are seeking new overseas markets to compensate for the downturn in PV projects across mainland Europe.

However, von Aichberger points out that weak energy infrastructure, corruption and political and social instability are hampering PV growth across Africa.

In the Middle East, more than 95% of the total PV capacity listed in the Middle East and Africa Deal Tracker is ground-mounted. Israel, currently the largest PV market in the Middle East, has the strongest roof-top PV demand in the region. The country currently has about 260 MW of completed projects and more than 300 MW of projects in the pipeline. However, large PV projects are expected to emerge in Saudi Arabia as soon as the country’s renewable energy tender program begins.

The third Middle Eastern market with strong growth expectations is Jordan, with nearly 600 MW of planned capacity. "Driving growth in the Middle East solar market is the desire to reduce the consumption of fossil fuels; however, the market is threatened by bureaucracy and potentially by political instability," von Aichberger says. Compared to the African PV market, the project realization rate in the Middle East has been higher. Of all capacity in the Middle East listed in the report, 22% are completed installations.