Solar System

What Drives Solar Energy Development?

Lebanon continues to plunge into one of the world’s worst economic crises since the mid-1800s (World Bank, 2021). The collapse of the economy has pushed the majority of the population into poverty, whose money has plummeted in value as the cost of nearly everything has skyrocketed. Annual inflation reached 206% in April 2022 (The National
News, 2022), while real GDP is estimated to have declined by 10.5% in 2021, on the back of a 21.4% contraction in 2020. Lebanon’s GDP was a mere USD 21.8 billion in 2021 from around USD 52 billion in 2019, the largest recent contraction among 193 countries worldwide. While a staff-level agreement was reached with the International Monetary Fund (IMF) in April 2022, solutions are yet to materialize. A full-fledged IMF agreement still awaits much-needed reforms, one of the most important being for the electricity sector. This was one of the first sectors to reflect the depth of the economic collapse since early 2020. Lebanon’s electricity system has aging infrastructure operating on shrinking imports of expensive heavy fuel oil and gas oil, and a deteriorating grid with high technical and non-technical losses. The result has been ever-increasing hours of blackouts. This has led to increasing reliance on the network of private generators running on diesel; since the removal of fuel subsidies, electricity has become expensive and unaffordable for
most Lebanese families. One of the few positive outcomes of the crisis has been a rising awareness among citizens and communities of the importance of Renewable Energy (RE) – and solar energy systems in particular – as a tool to reduce
dependence on diesel and avoid long hours of blackouts. Since early 2021, these systems have spread across the country, installed by small and medium-sized businesses, shops, and anyone able to afford them. However, this growth has been accompanied by numerous challenges. Although the government has tried to organize and regulate this rapidly-evolving sector, whether by implementing a process for the issuance of permits or leveraging financing mechanism to support these systems, the sector remains largely unregulated. As a result, providers often use unreliable or incompatible equipment that can harm the long-term efficiency and viability of such systems. Moreover, the social acceptability
of solar energy is still a matter of debate, which also affects the speed of the energy transition.

The Issam Fares Institute for Public Policy and International Affairs (IFI) at the American University of Beirut (AUB) and the Natural Resources Governance Institute (NRGI) have joined forces to shed light on citizen-led initiatives driving the energy transition during this time of crisis through the production of Chasing the Sun. This documentary aims to contribute to an advocacy and awareness campaign to help citizens understand and implement best practices when it comes to the development of solar systems, as well as decision-makers to adopt the necessary regulations for this sector to grow. It highlights the obstacles faced to develop the sector and explains where Lebanon stands compared to other countries in the region that witnessed a remarkable boom in solar generation during crises or immediately thereafter. The documentary team conducted interviews with a wide range of stakeholders in Lebanon, including energy experts working on the financial, legal and policy issues, solar energy businesses involved in implementation, as well as consumers with the means to install solar energy systems. This policy brief examines the drivers of renewable energy development in Lebanon, policy challenges to the development of the sector, case studies from Jordan and Yemen, as well as lessons learned for Lebanon.


An in-depth review of the literature shows that the growth of RE depends on a set of policy, economic, environmental, social, and geopolitical drivers.

Policy instruments at the national level have a significant impact on the drive towards
greater RE adoption…

Economic considerations play an important role in driving RE penetration…

On the environmental front, the literature explores the impact of climate change vulnerability and carbon intensity on renewable energy deployment…

Recent literature also shows that social factors may influence RE dissemination, including education of professionals, training programs and awareness creation (Camacho Ballesta, et al., 2022; Oguntona, et al., 2021)…

Finally, the role of geopolitics as a driver of RE penetration has also been investigated…


Even before the outbreak of the economic crisis, access to electricity across the country was extremely unequal. These inequalities were exacerbated by the crisis, as the removal of energy subsidies made electricity unaffordable for many. Yet, the solar energy market experienced unprecedented growth in demand since the summer of 2020, as the electricity
supply across the country steadily worsened due to acute fuel shortages. Citizens able to afford the cost, with access to cash and/or fresh funds rushed to install solar energy systems.

According to the Ministry of Energy and Water (MoEW), Lebanon went from almost no solar energy projects in 2010 to around a thousand in 2020, with a combined capacity of about 100 Megawatts (MW). Another 100 MW were installed
in 2021 alone, and officials expect around 250 MW to be installed in 2022, raising the total decentralized RE potential at the national level to 450 MW. Currently, there are around 130 companies specializing in the solar energy sector…

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