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Solar Energy Systems Value Chain

Aug 5, 2020

Before Yemen’s war crisis, Yemen had the lowest access rate to electricity (i.e. 40% of the population) compared with the regional rate of around 85%. The majority of Yemen’s supply of electric energy depended on fossil fuels, including Mazot, Diesel, and recently LPG. Energy subsidy was over 7 billion USD per year. The electric grid had over 30% energy loss.

Reliance on the indicated fossil fuel for electric generation is not sustainable in the longrun. After the 2015 war crisis, access to energy went down to zero per cent of the population in most districts in Yemen. This has created an enormous demand for solar energy systems. This was also compounded with the severe shortages of fossil fuel that lasted for weeks and months. Prices of solar PV watt/hour reached USD 1 when the international prices were less than 50 cents. While there is no authority to report exact imports of solar energy systems into the country, reports indicate over USD 2 billion worth of solar panels and batteries have entered the country since the crisis erupted. This includes various off-grid systems such as pico systems, solar home systems (SHS), photovoltaic (PV) pumping systems, and even mini-grid systems for residential and non-residential facilities such as schools, health facilities, and the like.

The crisis has created a need for solar energy systems. Much of the north could not access electricity generated in the Mareb power station. The severe shortages of fossil fuel prevented the use of electricity generators. In addition, government oil and gas revenues stopped leading to the removal of energy and fuel subsidies. As a result, solar energy systems were the only available option to access energy for a couple of years.

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