Legislation is driving the GCC's rooftop solar sector
As the GCC’s earliest adopters of rooftop solar tech begin to reap the benefits, regulatory support in Saudi Arabia, Oman, and the UAE should offer an extra boost
It has become difficult to miss the increased implementation of rooftop solar energy schemes in the Middle East.
Interest in rooftop solar tech is at an all-time high; residential customers, small- and medium-sized enterprises (SMEs), and large organisations alike have invested in the sector, and are already reaping cost-related rewards.
Encouragingly, regional regulations appear to be keeping pace with rooftop solar’s uptake, and this has been one of the main drivers in the technology’s meteoric rise.
Saudi Arabia’s Electricity and Cogeneration Regulatory Authority (ECRA) has prepared the Small Photovoltaic Solar System Regulation, which – although still in draft form – will set out the framework for the connection of small-scale solar photovolatic (PV) systems to the nation’s distribution system.
The draft regulation applies to small solar PV system installations of no more than 1 megawatt (MW) capacity, connected in parallel to the distribution system. PV installation must be in the same premises of customer consumption. Producing energy at one location, but consuming the it at another – also known as ‘wheeling’ – is not permitted.
The draft sets out the guiding principles of the proposed regulation and, like the Shams Dubai scheme, the customer will be able to export surplus electricity generated from the solar PV system to the distribution system.
Any electricity generated by the customer, which is in excess of the monthly consumption, will be carried forward to the next billing cycle, and offset against the customer’s future consumption. Furthermore, surplus units will be rolled over for a period of three years, following which, the distribution service provider shall pay the customer at the tariff approved by ECRA.
Similarly, Oman’s Sahim scheme incentivises the installation of solar PV panels in homes, as well as public and private facilities, in a bid to boost electricity production in the sultanate. The initiative has been launched by the country’s Authority for Electricity Regulation (AER), the organisation responsible for regulating the country’s electricity sector.
AER has developed a regulatory framework similar to the Shams Dubai scheme, which will enable SMEs, as well as homeowners, to install PV systems in their homes and sell excess capacity back to the government. AER will be responsible for referring customers to entities that would carry out the installation of the solar PV systems at the customers’ cost.
The customers will benefit not only from the long-term cost savings associated with solar energy, but also by being able to sell the excess capacity back to the government.
Unlike the schemes in Saudi Arabia and the UAE, which are based on net metering, the Omani scheme follows the feed-in-tariff (FiT) system. All future small-scale grid-connected solar PV systems will be channelled through relevant distribution companies.
To this end, AER has established a typical connection process, which provides general procedures to be followed by distribution companies when allowing the connection of a solar PV system to the distribution network. These guidelines cover all stages, from application to operation.
In the UAE, the existing regulatory framework in Abu Dhabi only allows for the grid connection of solar PV systems, and does not provide any compensation for surplus electricity transmitted to the grid.
However, proposed regulations would allow surplus electricity from solar PV systems to be exported to the distribution network, provided they do not exceed an aggregate capacity of 5MW at a premise. The customer will not be compensated monetarily, but will be able to offset surplus electricity exported against future consumption without any time limits. At the end of the year, surplus electricity is netted against the electricity supplied to the customer in the following year.
Gurmeet Kaur is partner, and Aditya Gaur is associate – projects, at Eversheds-Sutherland.