Dubai's newly-announced plan to build a Dh12bn solar energy park, to produce 1,000 megawatts of power by 2030, is a bold step in the right direction.
The project is central to a plan to "increase solar power to 1 per cent by 2020 and 5 per cent by 2030," said Saeed Al Tayer, vice chairman of the Supreme Council of Energy.
Reducing the UAE's dependence on fossil fuels and its carbon footprint are fine goals. To achieve these ends, it is important to proceed prudently.
The key challenge is to start off by building a regulatory framework that will foster innovation and efficiency. Vahid Fotuhi, chairman of the Emirates Solar Industry Association (and a columnist for The National) put the problem well when he told the state news agency this week the challenge is to find a commercially viable way to harness solar energy.
The global solar industry is still in its infancy and almost nowhere does it produce power as cheaply as coal or gas plants.
That means this region has an opportunity to open new frontiers. Cooperation with other countries, such as China, must involve not only the building of infrastructure but more importantly the creation of local expertise and new technology. It is likely such collaboration will be on the agenda next week, when Chinese Premier Wen Jiabao is slated attend the World Future Energy Summit in Abu Dhabi.
Huge projects built by governments are vital to provide the infrastructure to meet the country's basic energy needs, but technological innovation at the user level - by companies, mainly, including small ones - can improve conservation, reduce waste, and boost growth through job creation and the building of a more vibrant private sector. Subsidies at this level might be needed in the short-run, but should be temporary.
Solar power promises huge benefits in creating a sustainable economy and building long-term energy security. Although oil and gas produce around 47 per cent of the Gulf's GDP, they create only 1 per cent of the jobs. But for each megawatt of solar power, according to Mr Fotuhi, 15 jobs would be created across the entire value chain.
As the UAE embarks on ambitious solar projects, we must ensure that the regulatory framework brings government resources and private-sector innovation into harmony.
