Saudi corporate entities set sights on sun and solar power

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Facing rising energy consumption, the Kingdom of Saudi Arabia is getting serious about wind and solar power to offset domestic oil use. Corporate entities – reading the political tea leaves – are beginning to see solar power specifically as an actionable hedge against projected rises in energy costs.

A most telling recent announcement hit on October 18, 2017, when news broke that the The Saudi Public investment fund (PIF) has established the new energy services company – ‘Super ESCO.’ This new energy services company has been funded a healthy $507M, and is intended to work with the Ministry of Energy, Industry, and Mineral Resources; Ministry of Finance; and the Saudi Energy Efficiency Centre. The goal is to reduce government spending on the energy sector by 2030, as laid out by the Saudi Vision 2030 plan announced last year in April.

A fund of $500M for public entities from the family has given many private corporations the feel that it’s time for them to up their energy efficiency work as well. While nothing official has been said regarding future energy prices within the Kingdom, it seems to be a sentiment that the state will reduce the subsidy given to the general public via allowing a move toward market pricing for oil and electricity.

With the government itself investing in large scale solar power, and since solar power is easy to deploy on top of structures, covering parking or open land, commercial solar power is now growing. The 25 year fixed price of solar power gives predictability to business ledgers. Recent net metering legislation has given many private business people the structural support from the government they need to see to trust that long term political sentiment is there.

The private market for solar power is expected to be up 200-400MW of capacity per year, worth between $300-600MUSD per year. The government has a set a goal of 9,500MW of solar power installed by 2030. A recent 300MW project set global records for cheapest electricity when the tender got a bid of 1.79¢/kWh for 20 years.

The technical purpose of an ESCO is to discover the opportunities within a business entity to save money on energy – whether it be via lighting, insulation, HVAC, solar power, etc – and then offer up a loan with payments based upon savings. A healthy corporate credit score will mean cash flow positive on day one from savings on energy investments.

As of now Saudi Arabia burns 1/4 of their oil production desalinating water. The state is investing in large solar power desalination plants, along with further research. With the population young and consumption per capita increasing, the Saudi government knows something must be done.

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John Weaver
John Fitzgerald Weaver has worked in the Finance and Solar fields since 2005. He is currently employed by Beaumont Solar Co. with a focus on Commercial and Utility Development. John is a hands on salesman, with a strong engineering background who got into solar power because he felt a lack of inspiration in banking:

“Solar power aligned with many needs – my interests (technology), my morals (I think solar is important on multiple species wide levels), my need for growth (there is a lot to learn in this growing industry), and my desire to be part of something important (energy is one of the most important and fundamental – if not the fundamental – of human needs). I chose the Solar Life”

If you have a solar project in mind, you can reach John at 508-990-1757 extension 209

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