Saudi Arabia issues rules for small-scale solar energy generation

Irshad Salim — Saudi Arabia has issued a regulatory framework for electricity consumers to operate their own, small-scale solar power generating systems (offgrid) and export unused power to the national grid, the government said on Monday.

The announcement comes amid reports that many local companies including few mega contractors are venturing into small-scale solar installations, with some of them eyeing participation in upcoming public-private partnerships on utility-scale projects, as local service providers/partners to foreign project project developers and EPCs.

Saudi Arabia, the world’s top oil exporter, currently has few renewable energy facilities but has said it aims to generate 9.5 gigawatts of electricity from such sources annually by 2023 through 60 projects, investing between $30 billion and $50 billion in solar and wind.

Solar energy is expected to lead the renewables drive. The energy ministry is drawing up an incentive program to encourage both companies and households to generate their own solar power, but no timetable for its introduction has been set, an industry source told Reuters.

Households account for about half of power consumption in the desert kingdom, much of it for air conditioning.

The rules for small-scale solar energy generation will come into force next July 1 and cover small photovoltaic facilities with generating capacity of no more than 2 megawatts, the Electricity and Cogeneration Regulatory Authority said.

Consumers will have their excess electricity offset against their future consumption and after a year they will receive cash payments at a tariff approved by the authority.

“What has been achieved is an essential step forward towards the realization of the deployment of renewable energy in the Kingdom of Saudi Arabia,” said Fayez al-Jabri, the authority’s director-general of technical affairs.

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