Egypt imposes crippling fees on the solar energy sector

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The Egyptian Ministry of Electricity has announced the imposition of fees on solar power plants that produce more than 500 kilowatts of energy, from EGP 0.257 to EGP 0.329 per kilowatt-hour. The new fees come at a time when profit margins in the sector are facing severe pressure amid soaring commodity prices and shipping costs. Solar plant operators will pay fees whether the energy is used solely for self-consumption or whether the excess is fed into a grid.

Ayman Abdel Halim Heiba, Executive Director of the Energy Development Association, said that there has been a state of concern among companies and investors in the field of renewable and solar energy since the decision was issued. Heiba added that the decision sets a dangerous precedent that contradicts the state’s tendency to expand the production of renewable energy, and completely contradicts the president’s vision to maximise the contribution of solar and renewable energy to the electrical energy mix in Egypt.

The decision will increase the frustration and anxiety of investors in the renewable energy sector, lead to reluctance to pump more investments in this field and will affect the consumer decision for solar energy in all sectors (domestic, industrial, and commercial), he explained. Heiba stressed that this industry will lose the competitive advantage that it has so far enjoyed, which is the low price of energy generated from solar power plants, pointing out that there was no discussion with the investor associations and their representatives about the decision.