In 2025, solar electricity produced in the Middle East costs 1.09 cents per kilowatt-hour. The renewable energy capacity installed in the MENA region reaches 43.7 GW, up 44% in one year, according to the Dii Desert Energy MENA Energy Outlook 2026. Deployment now depends on factors other than the availability of technology.
Key Points
- According to the Dii Desert Energy MENA Energy Outlook 2026, 10.4 GWh of BESS were commissioned in Saudi Arabia in four projects of 2.6 GWh each; four separate projects of 500 MW/2 GWh are expected in 2027-2028.
- In Europe and North America, renewables encounter notably permitting delays; litigation is explicitly identified as a significant risk in Europe.
- Institutional and financial capacities are major constraints alongside others, including grid infrastructure and permitting procedures.
- By 2030-2040, countries with competitive auction frameworks and access to low-cost capital will progress more rapidly than those lacking these conditions.
The MENA Region as a Laboratory for Rapid Deployment
Four projects. 10.4 gigawatt-hours of storage commissioned. This sequence, documented by Dii Desert Energy, deserves examination.
In 2025, four sites totaling 8.0 GWh were commissioned according to SEC; three of them, Najran, Khamis Mushait, and Madaya, use Sungrow PowerTitan 2.0 grid-forming systems totaling 7.8 GWh. Four additional projects of 500 MW/2 GWh are under bidding. The documented projects employ Sungrow PowerTitan 2.0 systems with LFP cells; identity with batteries from Australian, American, and European projects has not been established. What differs is the framework within which they were built: competitive bidding processes with clear technical specifications, centralized regulatory authorities, and appeal procedures established before the administrative court.
The United Arab Emirates, Saudi Arabia, and Egypt have structured their renewable energy markets around a simple model. The State defines the capacity to be installed, publishes a specifications document, receives bids, and awards the contract. The process is contractually framed with penalties for delays and public mechanisms of financial support or guarantee. For a private developer, this model decisively reduces risk: the time between contract signature and commissioning is predictable.
A 44% increase testifies to strong acceleration in deployment, whose causes are multiple and do not by themselves permit evaluation of administrative quality.
European Procedures as a Cost Factor
Comparison with the MENA region highlights an internal tension in democracies between two types of legitimacy. Procedural legitimacy, which protects individual appeal rights, comes into friction with the legitimacy of collective objectives that these same democracies have set for themselves. This friction is inscribed in the architecture of legal systems built to protect minorities against majority decisions. It intensifies when the urgency of a collective objective outpaces the rate at which these protections permit action. Reforms undertaken in recent years seek to shift this equilibrium point without eliminating the rights themselves, which requires a more profound overhaul of procedural priorities than mere shortening of administrative delays.
The contrast with Europe and North America is documented, even if it remains uncomfortable for democracies to state clearly those systems of administrative law built on legitimate principles.
A notable proportion of renewable projects in Europe and North America experience delays related to procedural litigation. Behind this figure lies an operational reality: an onshore wind farm in France or Germany can mobilize between five and ten years between land prospecting and commissioning. A solar project in California navigates between federal environmental impact studies, state permits, and municipal appeal rights. Each procedural layer has a democratic justification. Their accumulation produces a paradoxical result: it slows projects meant to address climate urgency.
Disputes over land use, appeals from neighboring communities, and environmental assessment procedures constitute common vectors of delay in jurisdictions with developed administrative law. These disputes constitute intentional mechanisms for protecting rights. Their accumulation can notably slow deployment compared to centralized auction models.
This observation does not advocate for energy authoritarianism. It poses a governance question that liberal democracies will have to resolve for themselves: how to protect the rights of neighboring communities without blocking a transition whose absence of urgency will be measured in additional degrees. This is the type of tension that Philippe Aghion, in his work on innovation and regulation, qualifies as “institutional friction”: a friction that protects but costs, and whose cost accelerates when systemic stakes accelerate as well.
The Battle Over Costs Is Won, the Battle Over Financing Begins
MENA solar costs remain competitive against regional thermal alternatives. Battery storage followed the same curve: according to IRENA data on renewable costs, the levelized cost of battery storage has fallen more than 80% over ten years. The decline in storage costs strengthens the economic competitiveness of renewables by addressing variability challenges.
But a new asymmetry appears. Many MENA projects are structured as IPPs with project financing and public purchase agreements. Solid public buyers and contractual guarantees can lower the cost of capital; the level of financing also depends on the country, project, and risk allocation.
MENA solar competitiveness rests on sunshine, administrative efficiency, and access to capital at preferential rates—rare conditions in the Global South. Financing the global energy transition remains an obstacle that kilowatt-hour cost records do not resolve. The article on hydrogen and export markets documents a similar tension: production costs collapse, but financing and market structures remain the principal bottlenecks.
Scope and Limits of the MENA Model for Export
The administrative efficiency of Gulf bidding processes rests on several conditions that are not universally reproducible.
The first is land concentration. In countries where the State owns vast desert surfaces, land-use conflicts are virtually nonexistent. A mega solar project of 2 GW can be awarded, built, and connected without displacing a single neighboring resident. This structural condition does not exist in Western Europe nor in most countries with high population density.
The second is authorization governance. The single-window model, with a state interlocutor coordinating all sectoral authorizations, is not impossible in democracy: Portugal, Denmark, and the Netherlands have developed accelerated procedures that reduce delays without eliminating appeal rights. These are the experiences Europe is debating extending, within the framework of the Net-Zero Industry Act and permitting reforms undertaken since 2022.
The third is the size of the domestic market. MENA projects are sized for economies with strong growth in electrical demand, driven by desalination, air conditioning, and industrialization. Long-term contractual demand can support bankability and predictable revenues without automatically guaranteeing a utilization rate or specific profitability. Economies with low demand growth or fragmented electrical grids, such as many Sub-Saharan African countries, do not benefit from the same economies of scale.
These conditions do not make the model inimitable. They indicate that its adoption requires thoughtful adaptation, not exact copy.
Toward a 100% Renewable Grid: Who Will Be In by 2035, Who Will Be Out
The forward-looking question raised by MENA deployment transcends the region. If storage costs continue declining, a largely renewable electrical grid with storage would become economically viable in the medium term in areas with high solar potential or strong wind potential. The question is no longer technical. It is institutional and financial.
First scenario: countries with a competitive auction framework and access to low-cost capital could significantly accelerate their renewable transition in the short term. This is the likely path for Gulf economies, for some Southeast Asian countries like Vietnam, whose solar deployment follows a similar curve, and for major European economies that manage to simplify their authorization procedures.
Second scenario: countries without access to international capital at competitive rates remain dependent on fossil fuels, not from lack of technology nor solar or wind resources, but due to financing gaps. IRENA estimates that public guarantees, along with other risk-mitigation and concessional financing instruments, can lower the cost of capital in developing economies. The absence of risk-reduction instruments can slow deployment in developing economies, where the cost of capital is often higher. This is the scenario of a transition successful technologically and failed geopolitically.
Third scenario: reform of authorization procedures in Europe and North America accelerates sufficiently to close the gap with the MENA. Signals exist. The European Union adopted in 2023 regulations shortening permitting timelines for renewable projects. Several U.S. states are testing accelerated procedures for priority projects. Reducing procedural delays requires administrative law reforms that advanced democratic governments are advancing cautiously.
Among the variables that would distinguish these trajectories are authorization timelines in each jurisdiction and the capacity of international financial institutions to improve financing access for developing economies. These two indicators are measurable. They remain poorly measured systematically.
In 2025, the MENA model shows that energy transition can move quickly when institutional and financial conditions are met. These conditions remain unevenly distributed and play a determining role in deployment speed, as illustrated by variation observed between regions.
The question that remains open: which countries, in the coming decade, will have the political will to treat authorization speed as a strategic variable on the same level as the cost of capital?
Sources
- Dii Desert Energy, MENA Energy Outlook 2026
- IRENA, Renewable Power Generation Costs 2025 (cost database, 2026 edition)
- Chambers and Partners, Chambers Practice Guides, Renewable Energy 2026
