The MENA cleantech market

Q1 Top three technologies in terms of market potential over the next five years for each MENA Area

A significant shift in the expectations of industry executives has occurred during the last 12 months with regard to the growth of clean technologies in the MENA Region over the next five years.

We have seen a sudden growth in confidence for water technologies among the industry executives surveyed. Surprisingly, water was mentioned less frequently as a growth area over the last three years, but it has swiftly broken through to being the leader in market potential in the next five years. In addition, prospects for investment in water infrastructure have improved markedly over previous years.

Solar has been ranked second this year, although it had been placed as the technology with the highest market potential for the past three years. Confidence in solar had been growing based on the announcements of new projects and policies in the region, owing to its low pricing and interest rates, and abundant solar resources.

Following water and solar in the survey results are green buildings and energy efficiency. These technologies may rise in importance over the coming years, given their highest return on investment and fastest payoff as well as the high levels of energy consumption in several MENA countries.

Top technologies by rank across the GCC, the Levant and North Africa

Fastest-growing technologies in the GCC, the Levant and North Africa

Levant

The shift to water as the top technology for the future is also seen in the Levant region (Lebanon, Syria, Jordan and Palestine). Last year, wind was rated the third most important technology, but it has now dropped to the fourth position, alongside energy efficiency and green buildings, as awareness of water’s potential grows. The Levant differs from the GCC in that it rates wind and carbon capture and storage higher, while the GCC rates energy efficiency, green buildings and waste management higher.

North Africa

Water tops the list in North Africa, mostly at the expense of wind, which was given the second spot in growth potential last year and is at the third position this year. Solar continues its stronghold despite falling to the second spot this year. But these three are clearly the top-favored technologies. Among the others, energy efficiency has been consistently leading the rest over the past few years.

GCC

Water technologies, which rank at the top in the GCC, have edged ahead of solar. Energy efficiency and green buildings are third in the GCC, followed by waste management and wind. Carbon capture and storage is still under the radar of industry executives and may afford a pioneering opportunity for new technologies. Energy efficiency and green buildings continue to remain a priority for the GCC, due to climatic conditions, high energy usage, increasing commitment of governments and new private entrants as solution providers.

Q2 Which category of solar photovoltaic technology will experience the highest new installation volume (MW) in each area under MENA over the next three years?

This year’s survey has taken a more in-depth view of the potential technologies market and expectations. Within the solar sector, we explored industry preferences for the technology that will gain traction in the coming years. Four broad categories of solar photovoltaic technology came out as key contenders. These were commercial rooftop, residential rooftop, industrial rooftop and utility scale. Of these, utility scale is the top technology that is expected to be deployed across the markets of the GCC, the Levant and North Africa. This is not surprising as regional power utilities are expected to take the lead in the spread of photovoltaic technology.

Solar photovoltaic category growth expectations

The demand in the GCC and the Levant is driven by utility scale, which is followed by commercial rooftop. But in North Africa, residential rooftop is placed second. The survey results indicate that areas with high government subsidy will see utility scale as being dominant in solar deployments.

In the GCC, residential and industrial rooftop demands have the least potential for takeoff as there are relatively few power disruptions, and customers await government subsidies to increase rooftop deployment. Commercial rooftop deployments are expected to make up 25% as companies seek to cut down on their energy consumption bills, which are among the highest in the MENA Region.

The scenario in the Levant is different from the GCC and North Africa, as cash-strapped utilities are not expected to drive solar deployment outside of their own stated plans. Commercial and residential rooftop deployments are likely to increase in the Levant as the private sector and households will fend for themselves and attempt to reduce their dependence on generators.

Similar to the GCC and the Levant, utility scale is expected to shoulder almost half the solar burden in North Africa while residential rooftop will be its second biggest market.

The underlying assumption for solar deployment in the entire MENA Region is that wherever there is a high government subsidy, utility scale will dominate, and in areas with low subsidies, residential and commercial rooftop arrangements will grow.