What is going on with Middle Eastern solar prices, and what does it mean for the rest of us?

Abstract

For the third time in a decade, solar energy pricing records are tumbling in the Persian Gulf. As each previous wave of new records was met with incredulity, only for these prices to become the new normal around the world within a few years, it would be unwise to once again dismiss low prices as unrepresentative outliers. In this study, we show how local conditions and global macroeconomic factors have conspired to bring solar energy into a new regime of extreme affordability in the region and argue that the Gulf market, especially the United Arab Emirates and Saudi Arabia, represents the leading edge of the global learning curve and therefore offers a window into the likely near future of large-scale photovoltaics around the world. As this future increasingly appears to be one of previously unimaginably cheap energy, we conclude with a discussion of the ways in which the region and the world can seek to meet the opportunities and challenges of the coming renewable revolution.