Let There Be Light

With more than 300 sunny days a year, eight to nine hours of daily sunlight, and a generally moderate climate, Lebanon ticks all requirements to become a significant hub of solar power. In a report issued at the Beirut Energy Forum, the country posted 123% growth in solar energy capacity for 2016, compared to an international average of 33%. However, Lebanon is still overcoming basic obstacles such as a small landmass, high upfront costs, and government bureaucracy to bridge the demand-supply gap in electricity. Experts estimate the gap to be as much as 1GW in a country of about only 4 million people. According to the UNDP, 98% of Lebanese households face power cuts with rural communities commonly experiencing up to 12- to 18-hour daily blackouts.

To fight the seemingly never-ending power crisis, the political set-up has been shaken by several small plans driven by local governments and private initiatives. Renewable energy currently accounts for only around four percent of Lebanon’s power production, most of which is hydropower. Though, there has been substantial progress during the last five years; 2016 was Lebanon’s fourth year in a row of triple-digit growth in solar energy. Industrial solar power generation skyrocketed over 250% compared to previous year, showing a positive sign for the domestic industry. The high percentage growth over the last four years has markedly improved Lebanon’s prospects for meeting its 2020 goal of 100MW of solar capacity. Another important development is the drop in the average turnkey price for solar power system’s installation—from USD7,093 in 2010 to USD1,875 in 2016.

From the large-scale Beirut River Solar Snake—a 9,750sqm solar farm spread over the river—to the Harissa shrine, street lights, shopping malls, the roof of the American University of Beirut (AUB) engineering school and a growing list of factories, solar energy installations have gained popularity among municipalities, industrial, commercial, and residential users. The government has also signed agreements with several international partners. DREG is a joint venture between the UNDP and the Lebanese Ministry of Water and Energy. A 2017 initiative to expand solar usage by state-owned Electricité du Liban (EDL) drew 265 proposals from local and international companies to build solar farms across Lebanon. Additionally, the European Investment Bank (EIB) and French Development Agency (AFD) announced plans to provide over USD95 million worth of low-interest loans for renewable energy programs.

The subsidized program will provide loans with near- zero interests rates because the credit facility is designed to finance small-scale renewable energy projects. The program will run in parallel with existing energy programs by the Lebanese government. However, despite the well-documented progress over the years, critics say that government-backed projects need to catch up with private initiatives. The private sector, through the financing scheme National Energy Efficiency and Renewable Energy Action (NEERA) implemented by the Central Bank in 2010, has taken hundreds of loans worth more than USD300 million. According to a report published by the Issam Fares Institute at AUB on Lebanon’s solar potential, the Lebanese government, in comparison to Gulf states, lacks massive projects for solar power generation, such as the Shams solar power station in Abu Dhabi. Saudi Arabia aims to have 41GW of solar capacity by 2032.

Another obstacle in the rise of renewable energy is the monopoly of generator owners; over the years, the wealth and influence of Lebanon’s generator owners has grown to reach market worth between USD1.5billion and USD2 billion. Environmental activists say that many generator owners have gained influence over energy policy by building relationships with municipal officials and politically connected fuel importers.

Should Lebanon better provide a conducive environment for the private sector as well as scale government initiatives, the sun will shine bright on the renewable energy sector in Lebanon.