Jordan’s high irradiance, compared to its Gulf Cooperation Council (GCC) neighbors, makes the country “an interesting place to invest,” according to a local renewables analyst and policy expert who said anonymously.
High sunlight with moderate temperatures means solar yield is higher than in other GCC nations, he said, ensuring a better return on investment.
The solar business case is clear, with wholesale electricity prices higher than its neighboring countries – $0.09/kWh in March 2024, according to the United Nations’ World Population Review, versus $0.053/kWh in Saudi Arabia, $0.048/kWh in Bahrain, $0.032/kWh in Qatar, $0.029/kWh in Kuwait, and $0.026/kWh in Oman.
Residential electricity rates are highest, while commercial and industrial (C&I) consumers pay slightly less.
The analyst said the new government is driving “progressive” measures including heat pump and solar incentives for low-income households. Incentives are managed by the Jordan Renewable Energy and Energy Efficiency Fund (JREEEF), which has been operational since 2015.
Jordan’s Ministry of Energy and Mineral Resources said that 32,890 solar water heaters had been installed in 2023 under a former subsidy program. The state has also backed solar on farms and public buildings and building-integrated PV.
In February 2024, the JREEEF opened an online service handling queries about a solar heater and PV subsidy and in June 2024, issued solar tenders for National Aid Fund beneficiaries. In November the same year, the government passed electricity laws encouraging energy storage.
Now, thanks to the new legislation, electricity companies can establish grid-scale energy storage and individuals can install batteries for their own use. The measure is expected to promote electricity-market competition while boosting private sector investment and grid security.
The influx of small-scale, distributed generation has also caused problems for the grid, as is the case in many nations.
Energy imports
Jordan is heavily dependent on imported energy, mostly from multinationals with little to do with domestic energy consumption and production. There is little opportunity for two parties with such divergent interests to find common ground and Jordan’s grid is a free-for-all rather than an opportunity for long-term, quality investment.
As the analyst put it, the country is “locked in by conventional power purchase agreements (PPAs) where you have these long-term power generation agreements.”
Once again, he added, “This is the case for all developing countries, not specifically Jordan.” The analyst is hopeful there will be “an avenue of collaboration for Jordan and the PPA counterparts to move towards much fairer trade deals.” He added, there are negotiations happening in this regard all the time and November 2024’s legislative announcement is proof that the government is making some progress.
The most important thing is for the system to work in an “agile manner that can fit the local context,” said the expert, adding that he is not against foreign investment from the likes of the World Bank or the United Nations Development Programme, which have been involved in a lot of big solar projects in the kingdom.
While solar is getting significant political support, it also has the public’s backing. The local insider said this stems from the impact of the Arab Spring protests in 2011. “There was a lot of disruption in the international energy market around the Arab Spring,” he said. “The Egyptian gas line was disrupted and the energy market in Jordan was quite aggressive, so they changed from Egyptian gas to heavy oil and that also increased the carbon intensity of the electricity, which also increased the fiscal burden on public buildings.”
Mosques could not pay their electricity bills so communities appealed to JREEEF for help and a mosque fund was established. People saw that solar was an income-generating technology that avoided high energy costs.
