Reuters, Khobar Monday, 21 August 2017

Saudi Arabia will pay solar energy consumers as part of new regulatory framework for electricity consumers issued on Monday.

The framework encourages consumers to operate their own, small-scale solar power generating systems and export unused power to the national grid, the government said.

The rules 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.

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.

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.

A second source said the scheme was feasible at current Saudi electricity tariffs and further power price rises could make it more attractive. Seeking to save money in an era of cheap oil, the government raised ultra-low electricity tariffs for major industrial and residential users in early 2016.

It initially planned another round of tariff hikes in mid-2017; this has now been put on hold, partly to avoid hurting sluggish economic growth, but it is expected to go ahead late this year or early next. The government has not made a firm decision on timing, industry sources said.

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