UAE Solar Energy Market

UAE Solar Energy Market Size and Share:

The UAE solar energy market size was valued at 11.0 TWh in 2024. Looking forward, IMARC Group estimates the market to reach 73.5 TWh by 2033, exhibiting a CAGR of 22.33% from 2025-2033. The market is driven by the growing investment in clean energy infrastructures in the UAE, and the increasing adoption of solar energy in the hospitality sector, where it assists in reducing energy costs and meeting sustainability goals.

The UAE is striving for 50% clean energy by 2050 under its renewable energy goals. Initiatives such as the Dubai Clean Energy Strategy 2050 and Energy Strategy 2050 seek to enhance the share of renewable energy. These initiatives aim to decrease carbon emissions and increase energy efficiency, while also expanding the proportion of solar energy. The government also provides financial support and incentives for solar energy systems in various industries. Additionally, the government encourages public-private collaborations, fostering collaboration between local entities and international investors. This accelerates the uptake of innovative technologies and promotes rapid growth in the solar energy sector. The IMARC Group’s report indicates that by 2032, the renewable energy market in the UAE is projected to reach US$ 11.2 Billion.

The growing adoption of solar energy in the private sector, particularly in hospitality, is strengthening the market growth. Appealing to environmentally conscious tourists, hotels and resorts utilize solar energy systems to reduce energy expenses and achieve sustainability objectives. The hospitality sector consumes significant energy, making solar energy an economical option for lowering costs. Government initiatives like Shams Dubai are encouraging private companies to set up solar and heating systems on rooftops. Thus, assisting businesses in producing clean energy that lowers expenses and supports the renewable energy goals of the country. High end resorts in secluded locations employ solar energy to maintain a consistent power supply, minimizing dependence on diesel. As per the IMARC Group’s report, the UAE hospitality market is expected to reach USD 36.4 Billion by 2032.

UAE Solar Energy Market Trends:

Increasing investment in infrastructure

Infrastructure investment is one of the pillars propelling the market growth in the UAE. The Government of UAE and private investors are investing resources into establishing world-class solar power plants. The region is home to the world’s largest solar plants, increasing the country’s solar energy production and strengthening its commitment to renewable energy. In addition to large solar parks investment in modernizing the electricity grid is crucial for integrating solar power into the national energy system. Infrastructure development facilitates better management of solar energy generation and distribution that ensures a stable and efficient flow of electricity. According to the IMARC Group’s report, the UAE power EPC market is projected to exhibit a growth rate (CAGR) of 6.50% during 2024-2032.

Technological advancements

The data published on the IMARC Group's website states that the UAE's electricity market attained 183.7 TWh in 2024. Technological progress is enhancing the effectiveness and scalability of solar energy systems in the UAE. Advancements in solar panel technologies, such as bifacial panels and thin-film solar cells, enable solar panels to enhance energy generation efficiency. This also increases their ability to capture sunlight and generate electricity. This results in a lower overall cost per watt, thereby making solar energy more accessible for consumers and businesses. Improvements in solar energy storage options like cutting-edge battery technologies, are tackling the inconsistency problem linked to solar power. Energy storage systems allow for energy retention to be utilized during nighttime or overcast times, guaranteeing an uninterrupted power supply and enhancing grid dependability.

Rising cost competitiveness

Due to improvements in solar panel production, the price of solar energy has dropped considerably over the years. An increasing number of companies and people are choosing energy solutions as the cost of photovoltaic systems keeps decreasing. Strategic funding in extensive solar initiatives is further lowering expenses. Additionally, these extensive initiatives take advantage of economies of scale, reducing the cost per unit of energy produced. Moreover, subsidies and incentive initiatives designed to lower the expenses of installing solar systems are driving the market. This is additionally enhancing the competitiveness of the market, positioning solar energy as a feasible choice for both residential and commercial uses. The IMARC Group's report forecasts that the residential real estate market in the UAE is expected to reach US$ 55.6 Billion by 2032.

UAE Solar Energy Industry Segmentation:

 IMARC Group provides an analysis of the key trends in each segment of the UAE solar energy market, along with forecast at the country and regional levels from 2025-2033. The market has been categorized based on type.

Analysis by Type:

• Solar Photovoltaic (PV)
• Concentrated Solar Power (CSP)
   

Solar photovoltaic (PV) technology transforms sunlight into electrical energy through the use of semiconductor materials. Apart from this, its demand is growing due to its operational efficiency and extensive implementation. It is adaptable and suitable for both small home setups and large-scale utility solar projects.

Concentrated solar power (CSP) utilizes mirrors or lenses to focus sunlight on a receiver, producing heat for generating electricity. This technology features thermal storage functionalities, allowing CSP to deliver energy post-sunset.

Regional Analysis:

• Dubai
• Abu Dhabi
• Sharjah
• Others
   

Dubai is one of the prominent players with ambitious clean energy goals including the Dubai Clean Energy Strategy 2050. The Mohammed bin Rashid Al Maktoum Solar Park, one of the largest solar parks in the world, is located in the city. Dubai's lucrative regulatory framework and tremendous investments in solar infrastructure are driving city’s adoption of solar technology.

As the capital of the UAE, Abu Dhabi plays an important role in the country’s transition to renewable energy. The city holds the Noor Abu Dhabi solar plant, one of the largest solar plants across the globe. Focusing on energy diversification, it is emerging as a leader in solar energy with its Vision 2030.

Due to its focus on sustainability and diversification of energy sources, Sharjah is emerging as an important region. Although not large like Dubai or Abu Dhabi it is making strides by implementing solar projects in both public and private sectors. Its proximity to Dubai allows for the sharing of infrastructure and expertise, facilitating spread of solar energy technologies.

Competitive Landscape:

The primary players in the UAE are transforming the market through enhanced innovation in solar energy generation. Renewable energy initiatives, which include the Noor Abu Dhabi and Mohammed bin Rashid Al Maktoum Solar Park are set up. Global corporations and investors are funding extensive solar initiatives, promoting public-private collaborations that speed up market growth. Major contributors are concentrating on innovation to enhance solar PV systems and energy storage options. To increase energy efficiency and production capacity, significant contributors are spending money into infrastructure development. For example, in October 2024, Abu Dhabi’s Emirates Water and Electricity Company sought expressions of interest for a solar project with a capacity of 1.5 GW in Al Dhafra. The initiative will provide energy for 160,000 residences and cut down 2.4 million tons of CO₂ each year.

The report provides a comprehensive analysis of the competitive landscape in the UAE solar energy market with detailed profiles of all major companies.

Latest News and Developments:

• July 2024: South Korean company Eximbank announced to invested $150 million in a UAE solar project in the Ajban desert with a production capacity of 1,500 MW. The project is set to complete by 2026 and supports the UAE’s renewable energy goals.

UAE Solar Energy Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the UAE solar energy market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the UAE solar energy market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the UAE solar energy industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.