Calls for Dubai to introduce feed-in-tariff to aid rooftop solar

A feed-in-tariff encourages solar generation by compensating customers at above-market rates for the green power they produce.

In Europe, the amount of time it would take for a commercial customer to break even for rooftop solar investment averages around five to six years. Reuters

Green energy companies want Dubai to consider implementing a feed-in tariff (Fit) to accelerate rooftop solar in the emirate.

The debate emerged at a meeting in Dubai on Thursday to discuss the implementation of Shams Dubai, a green energy project of the Dubai Electricity and Water Authority (Dewa). Suppliers and potential customers discussed problems and concerns for rooftop solar.

“The largest [solar] markets in the world, like Japan, went through a Fit,” said Martin Moch, the managing director of Belectric Middle East. The German green energy supplier said the most successful solar markets began with a Fit before transitioning into a net metering structure. “Our concern is how fast [this initiative] can go with net metering and without a Fit, especially because the price of power is not so much,” he said.

A Fit encourages solar generation by compensating customers at above-market rates for the green power they produce.

In contrast, Dubai’s plan is for a net metering system, under which customers receive a market-value credit for any excess power they produce.

In January, Dewa released a framework under the Smart Dubai plan to allow installations of solar photovoltaics (PV) on residential and commercial building rooftops.

The proposal calls for a net metering system under which customers’ solar production is meant to be capped at the amount of electricity consumed on average by the individual or company. If an excess of power from solar is produced and fed back into the grid, consumers receive a credit on their next electricity bill.

A Fit is usually a long-term agreement under which customers are compensated for every kilowatt per hour (kWh) they produce.

Armando Dominioni, Dewa’s strategy and business development manager, noted that the plunging cost of photovoltaic technology – down 75 per cent over the past five years – means customers might not need the extra encouragement that a Fit provides. He noted that labour costs in Dubai are also low.

“[Rooftop solar] can be bigger, and we want it bigger,” said Mr Dominioni.

Dewa said it would refrain from giving numbers at this stage on the amount of prospective users, but was bullish on the initiative.

Like Mr Moch, Manuele Ceccarelli, business development manager at Spain’s Ingeteam, which produces photovolatic tech, believes a Fit is worth considering.

Mr Ceccarelli said the implementation of a Fit, as well as increasing the emirate’s electricity tariff, would lower the payback period for customers.

He said that payback periods for larger consumers in Dubai that pay 45 fils per kWh for electricity would be about eight years. He said that was a result of low electricity tariffs and harsh weather conditions such as sandstorms that increase costs of operations and maintenance.

In Europe, he noted, the amount of time it would take for a commercial customer to break even for rooftop solar investment averages about five to six years.

The Middle East Solar Industry Association (Mesia) estimates that the size of the rooftop market in Dubai, in terms of capacity, is about 2,500 megawatts. Mesia’s vice president Imtiaz Mahtab said that under the Shams Dubai programme alone, maybe 500 MW could be installed – “but it depends on the scalability”, he said.

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