x Abu Dhabi, UAEThursday 27 July 2017

Solar energy just needs a little help until it gets rolling

The potential for an efficient solar energy market is there, but unless there is a structure and an economic incentive scheme in place, that potential will not materialise.

Why don't we see more solar power in the UAE?

This is the first question people ask me when I introduce myself and tell them that I work in the solar industry.

With Abu Dhabi hosting the 2012 World Future Energy Summit, this question is more relevant than ever. After all, as I am continuously reminded, there is no shortage of either sun or land in the UAE. So how come we don't see more solar panels in the desert outside Abu Dhabi and Dubai? The answer is complicated. In fact, when I try explaining it to people I often sense their minds drifting away.

Recently, I had an experience with my son Cyrus which provided me with an excellent anecdote to illustrate the reasons behind the scarcity of solar power in the UAE.

Cyrus is now 5 years old, and always hungry for a new adventure. I felt he was ready to take on the challenge of riding a bicycle without stabilisers.

At first, he was hesitant. He felt he absolutely needed the support of training wheels. But when I introduced an incentive scheme (chocolates), I was able to convince him to remove the extra wheels and settle for me holding the back of his seat as he cycled. He agreed to give it a shot.

As we zigzagged through the park, I released my grip and gave him the space to ride by himself. Initially it was just for a split second. But with each turn around the park, I reduced my support further. By the fourth turn, my hands were completely off the bike as I trotted quietly behind him with a huge smile on my face. Cyrus had effectively reached "gravity parity" - the point where he could ride the bike without extra support.

Our solar industry today is very much in the same place as a young child learning how to ride a bike independently. The potential is there, but unless there is a structure and an incentive scheme in place, that potential will not materialise.

Just as Cyrus needed a little help to get going, so does our solar industry.

The next question is about exactly what support the industry needs.

First, we need a regulatory framework that governs the production and distribution of solar power. Currently, it is legally not possible for most residents and business owners in the UAE to generate solar power and feed it into the electricity grid. In Dubai, fortunately, laws are currently being drafted to provide a structure, like the hand holding the back of the bike, to guide the solar industry forward. This is a very encouraging step.

Second, the solar industry needs short-term "green subsidies" which are tantamount to chocolates for a child. There are subsidies that apply to conventional power generation, but these do not at present extend to solar. So solar is at a disadvantage.

To make solar commercially attractive, there will have to be a green subsidy that bridges the gap between the cost of generating solar power and the regulated cost of conventional electricity. When we close this gap, solar will become an instant success.

Both Dubai and Abu Dhabi are studying this policy tool to see how best it can be implemented.

The good news is that, in the meantime, the cost of solar power is dropping more quickly than anyone expected. Photovoltaic solar panel prices have dropped by 40 per cent over the past year alone. Prices are expected to decline further in the years ahead as supply gallops ahead of demand.

This means that as solar becomes less expensive, there will be less of a need for green subsidies.

Over time, solar power generation in the UAE will reach "grid parity" - the point where energy can be produced from sunlight without extra financial support being needed.

It's very much like holding the back of the bicycle seat. At first a lot of holding is needed, but over time the need for this shrinks as the necessary skills and expertise start taking shape.

After I went several rounds running in a crouched position behind my son, ready to catch him in case he fell, he whispered the words "Daddy, let go". He was ready.

Nervously, I slowed my pace and let him go. As I looked ahead, I could see his cute red helmet fade into the distance.

"I'm free!" he giggled proudly, as the morning sun beamed off his shoulder.

 

Vahid Fotuhi is the Chairman of the Emirates Solar Industry Association (ESIA)