Emerging markets 2015: Dubai's commercial rooftop segment target for new UAE scheme

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pv magazine is beginning the new year with a look to emerging solar markets. In the second of the series, Jonathan Gifford takes a look at prospects for a rooftop market in United Arab Emirates.

The press and renewable energy industry has welcomed a new resolution facilitating the uptake of rooftop PV in Dubai. On December 15, the UAE’s Executive Council passed a motion that would allow for rooftop PV systems to operate under a net metering system. Dubai’s Crown Prince Sheikh Hamdan bin Mohammed passed the resolution.

The Dubai Electricity and Water Authority (DEWA) will administrate the scheme. The Middle East Solar Industry Association (MESIA) has reacted to the resolution with optimism.

“This is a very promising step in the right direction for DEWA,” said Vahid Fotuhi, president of the Middle East Solar Industry Association when contacted by pv magazine. “Once the implementing regulations are unveiled by DEWA we will see solar panels appear on rooftops all around Dubai.”

The rooftop PV program is to be rolled out on a net metering basis, with no direct subsidy paid to facilitate solar uptake. The effective tariff is expected to be around US$0.12/kWh, although some media reports have indicated that electricity bills will not be allowed to go into the black if an array produces more electricity than is required on site.

“It is expected investors will be able to break even in around seven to eight years [under the program],” said Fotuhi. “It’s expected that over time commercial users will start adopting this as EPC prices continue to go down and the DEWA end-user prices for electricity goes up over time.”

Commercial users are the most likely to take up the scheme, according to Fotuhi, as this is where electricity demand and therefore utility bills are highest. Furthermore, large industrial rooftops are well suited to PV and cost of installation, per kWh, is reduced through economies of scale.

Local support

The local press has come out in support of the scheme. The National, Dubai’s English language newspaper, said that Dubai must diversify its electricity supply for both economic and environmental reasons. Dubai relies largely of natural gas generation for its electricity.

“Rooftop solar panels on private homes and offices in Dubai – the most populous of the seven emirates – would undoubtedly be a significant development,” The National wrote in an editorial. “They would be the first such scheme in the Arabian Gulf and a powerful statement of the UAE’s commitment to renewable energy. What will start on rooftops in Dubai must continue well beyond the emirate’s borders.”

Speaking to The National, MESIA’s Fotuhi echoed these remarks: “I think this is the beginning of a very exciting chapter, not just for Dubai, but for the entire Middle East and North Africa.”

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