With the increasing demand for solar energy in the UAE, it is a profitable business idea to start trading in solar panels. However, to get a solid overview of this growing industry, you need to check out this guide before starting trading in Solar Panels in the UAE.
#1 Solar energy consumption in the United Arab Emirates - Demand
Despite its status as a significant oil producer, the United Arab Emirates (UAE) has taken moves to adopt solar electricity on a massive scale. Solar power in the United Arab Emirates is abundant enough to cover most of the country's electricity consumption. Here are some reasons why solar consumption is increasing in the UAE:
The energy use per person and primary energy demand for non-renewable energy in the UAE have a decreasing rate since 2016. This decreasing consumption of non-renewable sources gives a positive indication and a good opportunity for the renewable energy sector, especially solar energy. That fall comes in view of the investments made by the UAE toward renewable energy and reducing the demand for fossil fuels.
The increase in solar consumption is also related to lower prices. Solar PV system prices in the United Arab Emirates have dropped by more than 76% since 2018. Furthermore, the UAE has the world’s lowest tariffs and power purchase agreements (PPA) pricing at AED 4.97 fils (USD 1.35) /kWh. Nearly, every year, the UAE establishes a new record for the lowest solar purchase power agreements.
A recent study on the trend of solar energy production and consumption in the UAE stated: "Based on solar radiation parameters, including artificial intelligence techniques, the UAE has the highest annual solar energy percentage in the Middle East and North Africa." It also added, " The demand for solar panels in the country is increasing.”
Several giant solar projects, such as Noor Abu Dhabi (A capacity of 1200 MW) and Mohammed bin Rashid Al Maktoum Solar Park (A total capacity of 5000 MW) contribute significantly to the country's solar energy supply.
Moreover, to go solar, the UAE introduces an easy process for applying and installing the panels. That is knowing that the price of running solar panels in homes will continue to fall as more companies join the market.
#2 Solar energy market in the UAE - Supply
The UAE's annual solar power growth is steadily rising. The solar energy industry is expected to develop at a +15% compound annual growth rate (CAGR) by 2025. This percentage indicates a higher potential in the solar energy industry. Governmental initiatives and incentives are the primary drivers of this growth. Obtaining further aid and support from global solar energy organizations is also helping to build the United Arab Emirates solar energy market.
Furthermore, solar technologies are notably efficient in outperforming fossil fuel sources as their prices fall. Solar PV system prices in the United Arab Emirates have dropped by more than 76% from 2018 to 2022. This decrease results from advances in technology and the relocation of manufacturing to countries with lower labor costs.
The steady decrease in solar system costs encourages individuals to convert to solar electricity for either home or business purposes. However, the high cost of solar installation and equipment maintenance, such as the cost of cleaning solar panels, and the restricted power supply, may impact the demand and supply of the solar industry.
The good news is that this is not always the case if other variables, such as transportation and labor expenses, can be controlled. We shouldn't overlook that the UAE is heavily investing in research and labor in the renewable energy generation sector and how these investments impact lowering the overall costs. In 2020, solar technologies created around 7800 sustainable jobs in the UAE economy which contributes to lowering the prices of solar systems’ maintenance.
With this overview of the solar industry supply and demand in the UAE, you can observe how this market is flourishing in the UAE. Now, let's see why you should consider trading in solar panels and cells and how easy it is to start in the UAE.
#3 How easy is it to start your solar energy business in the UAE?
As we stated before, solar panel prices have declined dramatically over the years. In light of this, the UAE, which has one of the largest hydrocarbon reserves, intends to increase its use of non-hydrocarbon energy sources, such as solar energy, in its energy mix. According to a recent study, USD 4.5 billion would be required by 2030 to meet the UAE's carbon reduction targets. Here are Some of the reasons why you should invest in Solar panels in the UAE:
-
Abundant solar Resources
This comes as no surprise with the UAE's abundance of solar energy. The UAE is located in an area with significant sun radiation. It has a lot of solar potential, with a mean annual solar radiation of 2285 kWh/m2 and 10 hours of sunshine per day. Particularly, the southern parts of the UAE offer significant potential for photovoltaic (PV) electricity generation. That is because of the low concentration of dust and low humidity levels in the southern area.
-
Fast Growing sector
Renewable energy generation was minimal before 2015. However, according to current market research, the renewable energy contribution in the UAE power generating mix reached over 7% in 2020 due to technological developments and policy adjustments in the past few years and had increased further in 2022.
The solar energy market of UAE has been showing a significant growth rate. The UAE has a compound annual growth rate of 7.5%, with Dubai alone expected to achieve 14% by the end of 2022. The significant increase in solar energy installation capacity in the UAE is remarkable. It is a new, but rapidly expanding, green business niche.
-
UAE leadership facilitates investing in Solar power
Solar energy is now the most common renewable energy source in the UAE. That is not only because of the solar resources of the country but also the policies set by emeriti leadership to increase investments in this sector. This growth will bring opportunities and milestones in UAE’s solar market.
The UAE's strategies aim to build energy-efficient systems using renewable resources that will secure future socioeconomic progress and strengthen the country's position as a reliable crude oil supplier by reducing domestic fossil fuel consumption.
The solar energy generated by the Al-Dhafra project alone is comparable to eliminating 470,000 vehicles from the road. It also offers one of the most affordable solar energy pricing, at USD 1.35/kWh. So far, it has one of the lowest solar PPA costs in the world.
As the country works under the 2050 strategy of climate neutrality, it targets an energy mix that combines renewable, nuclear, and clean energy sources to meet the UAE’s economic requirements and environmental goals. Clean energy share is set to reach 44%, particularly from nuclear and solar power.
Following the plan, the construction and planning phases of various solar projects with large capacities are set to be fully achieved by the end of 2050. Furthermore, the UAE government intends to invest AED 600 billion by 2050 to maintain fulfilling rising energy demand and safeguard the country's economy's long-term prosperity.
#4 So, how to start a solar business in the UAE?
Steps to establishing a renewable energy business in the UAE:
- Select the legal structure of the firm and ownership
- Create a brand name, you cannot use a name that is already licensed in the Emirates.
- Set a physical location for the business in the UAE.
- Incorporation phase with the assistance of The Department of Economic Development
- Trade license application
- Power generation license application
- Approvals and permits from the appropriate regulatory agencies.
- Labor enrollment (the Labour and Immigration Department)
- Open a bank account for your solar business.
If you are only interested at the moment in installing your solar system at your facility, here is the process of how to install your solar system in the UAE:
#5 How to install a solar system in the UAE?
Whether it is a small-scale or large-scale system, Applying to establish your solar panels is free, and you could have a modest system producing 10kW or 20kW. This usually takes a week to set up and start. However, large-scale commercial or industrial systems require four to eight weeks. Each Emirate has its National authority that is responsible for receiving the applications. Dubai Electricity and Water Authority (DEWA), the enrollment process for the Shams Dubai program for solar energy consists of four stages in order:
- The No Objection Certificate (NOC).
- The Design Approval.
- The Inspection and Connection.
- The Generation.
In Dubai, DEWA provides an online estimator so you can figure out the cost of your own system and check whether anybody else in this area is participating. Other costs to consider when installing solar panels in Dubai are:
- Cleaning costs as solar panels must be cleaned from dust every 15 days;
- Roof reinforcing steel structure;
- DEWA charges for the installation of the meter that monitors the power generated by the PV systems at a one-time connection cost of 1,500AED.
#6 Solar soft costs
Non-hardware charges, often known as soft costs, affect solar power prices. Permits, funding, solar installation, and maintenance are all included in these expenses. Besides costs, solar companies spend to seek new clients, compensate suppliers, and meet their bottom line. Soft expenses account for the majority of overall costs for rooftop solar energy systems.
#7 Leading solar suppliers in the UAE
The United Arab Emirates solar market concentration in 2021 is evaluated as partially fragmented. These are among the leading solar enterprises that serve the UAE with solar equipment and supplies.
- First Solar Inc.
- Enerwhere Sustainable Energy DMCC
- Masdar Abu Dhabi
- Dubai Electricity and Water Authority
- City Solar
- FSolar
- Beta Green Energy
- SirajPower
- Cleanmax
- Yellow Door Energy
#8 The world’s largest solar panels producers and exporters to the UAE
The country that ranks first in the production of photovoltaic panels in the world is China. China produces more than 70% of the world’s photovoltaic panels on the market. Changzhou in China’s Jiangsu province is one of the main centers of solar panel production.
Another country producing photovoltaic modules is South Korea. South Korea’s share of global panel production is 6%. It is also one of the most popular sources of modules in Central Europe. Malaysia, Europe, and India are placed next. However, according to volza.com India is the top exporter of Solar panel cells to the UAE.
Last year Solar panel export shipments from India to the United Arab Emirates amounted to 407 shipments. While the UAE makes solar panels at home, the country imports most of its Solar panel system components like solar cells from India in the first place, then comes China, Vietnam, and the USA.
The Top 5 Product Categories of Solar panel Exports from India to the United Arab Emirates in the previous 3 years are
- HSN Code 85414022: Photovoltaic cells, assembled in modules or made up into panels.
- HSN Code 85044010: static converters: electric inverter
- HSN Code 85414011: photocells- solar cells whether or not assembled in modules or panels
- HSN Code 85389000: boards panels consoles desks cabinets
- HSN Code 85042200: liquid dielectric transformers: having a power handling capacity exceeding 650 kva but not exceeding 10000 kva
→ Transport your Solar Panels
Now you have a good overview of Solar Panels Trade and installation in the UAE, if you are planning to export or import your solar panels and cells to or from China, India, the USA, or any country; We are here to help. Vervo Middle East offers convenient solutions for businesses and individual shippers who want to transport solar panels worldwide. Connect to one of our logistics experts today:
