An Arab expert working at an international oil company delivered a valuable lecture during an international forum specialized in energy issues held in Britain every summer. He presented a study on the international solar energy sector. While writing on the subject of research is permissible, the conditions of the forum prohibit mentioning the name of the researchers or even identifying the forum itself in an attempt to maintain the freedom speakers need to express their opinions.

The expert mentioned that the solar energy sector is no longer an issue confined to research and development or in the embryonic stage, but rather, it has evolved into an industry and a business globally growing at almost 50% annually. Tens of billions of dollars raised in international stock markets are invested by companies specializing in this sector. The five leading companies in the solar energy sector are: Q-Cells of Germany, LDK of China, Suntech of China and BP of Britain. Evidently, the two most prominent international companies that secure the essential solar energy equipment are Chinese whereas the third is the international oil company BP which has established a special division for solar energy. The expert mentioned that BP intends to triple its investment in the solar energy sector over the next three years, an indicator of its interest in this industry which expects massive future growth as well as growing profits in the foreseeable future.

Despite the support offered by the governments of industrialized nations to develop solar energy, rapid and significant growth cannot be without recognition of its future benefits and success both by consumers and companies alike according to the expert. He specifically mentioned that international oil companies are interested in developing solar energy because it is a renewable source of energy that does not pollute the environment.

The Arab expert who holds a prominent post in solar energy development at an international firm raised a central question: is solar energy an industry that we Arabs should be interested in developing and using along side with our interest in developing the oil sector? His response was positive. In fact, he even called for Arab participation in the scientific innovation surrounding this sector in its early stages of development before catching up with relevant scientific inventions.

This opinion raised many questions. Should the private sector in the Arab world pay attention to this industry or should this be left to the national oil companies? In reality, there is room for both sides to take the necessary initiatives. It is true that national oil companies possess the significant scientific competencies and the necessary capitals, but it is also true that this industry in particular does not need huge capital requirements. What matter are competent marketing, maintenance, and cost-cutting to lure consumers.

The issue, according to the expert, is not limited to expressing interest by one side or another, but it also requires new legislation to expand the use of solar energy as the case is in Cyprus. It is pointless to construct a few scattered factories as the situation is in a few Arab countries but without offering the necessary and essential support for this industry. The expert demanded that part of the Arab capital flowing abroad these days, estimated at billions of dollars, be invested in this industry along with providing the needed support for the foreign companies that invest in this sector to help transfer the technology and know-how to the region. Here too, necessary legislation should be enacted to encourage the local consumption of solar energy.

The use of solar energy has become a necessity in many Arab countries, both oil producers and non-oil producers. For oil-producing countries, it is very possible to replace oil fuels used to generate electricity by using solar energy and other renewable alternatives which will help maximize the oil rents generated from additional exports at the current prices.

For non-oil producing countries, on the other hand, the use of solar energy to warm water helps reduce to significantly cut household expenses, especially given the rising oil prices. It is worth noting that the investment cost in this sector is very small and does not exceed a few hundred dollars. In countries with thriving tourism sectors, hotel owners find the perfect alternative in solar energy nowadays, especially with the high cost of fuel and the increasing electricity outage intervals in many Arab countries.

The sun is abundant in Arab countries and we always complain about the lack of appropriate industries. Would the national oil companies help develop this industry as the case is with international oil companies or would the private sector play a pioneering role in this field? Would the governments play a supportive role by passing the appropriate legislations?

Al-Hayat, August 4, 2008