Solar Brothers

Moataz and Mahmoud El Wardani have seen business at their fledgling start-up company soar since Dubai became the first city in the region to pass legislation allowing grid connected rooftop systems to be installed.

Moataz and Mahmoud El Wardani were ready to make their move as soon as Dubai passed legislation earlier this year allowing building owners and occupiers to install grid connected rooftop solar packages.

The Egyptian brothers, who were born and raised in the UAE, have wasted little time in building up a sizeable project pipeline of around 20MW for Shams Energy, the fledgling solar installation company they started a year ago.

Their first project, a 200kW installation for a family owned business in Dubai, is due to complete in July and there is enough work in the bag already to keep them going for the rest of the year and beyond.

Under the new net metering tariff system, investors are entitled to take one unit of electricity from the grid for every one they supply. So far interest in the scheme has been strongest among state-controlled entities, though as their first project indicates, Shams Energy is seeing reasonable demand from the private companies too.

“Maybe 20-30% of demand is coming from the private sector such as family owned businesses,” says Moataz, the older brother and Shams Energy’s chief executive officer (CEO).

“Typically a warehouse in Al Quoz or Jebel Ali because they have decent rooftop space unobstructed by shading from high-rise buildings around them. And they are high consumers of energy so adding some solar can lead to a big reduction in their electricity bills.”

“Financially it makes sense to invest in solar if you have a factory or a warehouse,” adds the Managing Director, Mahmoud. “You can cut your bills by 30 to 50% depending on the rooftop availability and get a return on your initial investment of 11% to 13% per year over 25 years and you break even in seven years.”

Industrial clients are long-term investors, typically staying in a premises for a decade or more. As well as the savings they can make on their electricity bills they see a marketing advantage in promoting their companies as a pioneer of green energy in the region, the brothers say.

However they concede that the residential market may be a tougher nut to crack. As observers have pointed out, a huge proportion of the population are foreign expats who typically come to Dubai for a few years and choose to rent rather than buy their homes.

In this case it makes little financial sense for the occupier of a villa to invest in a rooftop solar package if they don’t plan on staying long enough to earn their money back. And there is little or no insensitive for the owner to do so since they don’t pay the bills.

Added to this, financing can be an issue because banks are less inclined to lend when there is no money involved. With a feed in tariff (FIT) system owners are paid for any surplus power they supply to the grid but that is not the case with a net metering system where the customer just receives a credit on their bill.

“We’re in talks with some banks and we hope that eventually they will offer financial products,” says Moataz.
“That would really help the residential sector. Corporate and industrial clients already have access to finance so it’s not an issue for them.

“It’s still early days, too early to say whether finance is a bottle-neck or not,” he adds. “By the end of this year we’ll have a clearer view of which sectors are most interested in this technology. But we’ve seen a phenomenal amount of interest from both private and government bodies. DEWA is running training sessions for local installers and doing a lot to create awareness. They’ve done a lot of hard work. Now it’s up to the free market.”

Even if rooftop solar struggles to gain traction in the residential sector in Dubai, the brothers are optimistic that other sectors will keep them busy for some time.

 “We hoped before the legislation came out that there would be some kind of incentive involved so we were slightly disappointed, but seeing the demand I think it’s going to work fine,” says Mahmoud.

“We’ve seen other more mature PV markets where the systems have changed over time,” adds Moataz. “Net metering is working for now but if demand changes I’m sure DEWA will respond to that. We’ve seen the cost of fossil fuels fall recently but in the long-term it’s going to rise while PV is going to get cheaper as it gets more efficient. That will be reason enough for people to turn to solar.”

The brothers also see huge potential in developing off-grid projects in more remote areas of the UAE where gensets running on diesel are typically used. An investment in a hybrid solar/diesel genset solution would have a payback of as little as four to five years, they say.

“In remote areas or some of the resorts which are not connected to the grid in Dubai, Abu Dhabi or the northern emirates solar can provide an incredible solution,” says Moataz. “It’s a modular system, it’s scalable, so if you start today with a 10kW installation and your demand goes up you can scale it up according to your consumption.”

The other major emerging regional market that Shams Energy is monitoring closely is Egypt, which has ambitious plans to add 2.3GW of solar PV capacity within the next few years. This would mean turning the company’s attention to utility projects as well as rooftop, a different scale altogether.

But given their strong ties to both countries, the brothers think this dual focus will give them an edge in the market. They also plan to hire people with international experience of solar PV to allow Shams Energy to better serve its customers in Dubai and eventually Egypt as well.

For now the brothers are focused on Dubai and looking forward to completing their maiden project in July which will be a tremendous milestone for a company started just one year ago.

Mahmoud says: When I compare the pitches we’re doing now to a year ago, there’s a big difference. People are convinced. There’s been a change in culture.”

“It’s going to be a huge success and 2015 will see a lot of rooftop PV connections to the grid which has not been seen in this region before,” adds Moataz. “As usual, Dubai is leading the MENA region for this technology.”

Working with the best
“Quality is very important because the system needs to last for 25 years. We’ve decided to work only with tier 1 suppliers to make sure we provide the most reliable systems. We chose to work with the best in the market.” Moataz

Solution provider: ET Solar, Schneider Solar
Panels: Trina Solar, Sunpower, Jinko Solar, Yingli Solar
Inverters: ABB, SMA
Mounting system: Schletter

– 200kW Shams Energy is due to complete its first rooftop project in Dubai in July
– 200MW The business pipeline that Shams Energy has built up in its short existence

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