The Middle East and North Africa could see investment in solar reach US$50 billion by 2020 as governments push to exploit the region’s huge resources, research claims.

A report published by business intelligence firm MEED Insight in conjunction with the Middle East Solar Industry Association (MESIA) estimates that up to 15GW could be built in the region by 2020 as part of a much bigger drive towards renewable energy.

While the region had only a small 217MW of solar installed as of this month, the report predicts this situation will change “radically” over the next few years as governments “embrace” renewables.

This process would be driven by the increasing strain on fossil fuel resources, the report said.

According to a survey by MEED Insight, the region’s solar energy capacity could grow to 15GW by the end of 2020, split equally between PV and concentrating solar power (CSP) technologies. This would translate into direct investment of US$50 billion, excluding transmission and distribution.

The report highlights Saudi Arabia as the having the largest potential solar market in the region, although it picks out a number of other countries that have set ambitious solar targets, including Morocco, Egypt and Algeria, which are aiming for 1.5GW, 1.8GW and 3GW of solar respectively.

But the report said that to fulfil their ambitions, MENA countries needed to put in place the right regulatory and financial incentives.

“Currently, there lacks a cohesive approach to developing a renewable energy industry,” said Ed James, head of MEED Insight. “Governments need to provide the necessary financial and regulatory incentives such as feed-in tariff, net metering and tax breaks if investment is to be attracted and to grow. While there is evidence that this is happening, it needs to accelerate if the ambitious 2020 targets are to be achieved.”

Steve Griffiths, research director at MESIA, added: “Prior work by MESIA has shown that solar power has become commercially viable in the MENA region due to dramatic reductions in solar equipment costs, a good fit of solar resources with regional power demand patterns and increasingly limited access to cheap hydrocarbons for power generation.

“Nonetheless, regional challenges exist for achieving widespread deployment of solar power, including lack of supportive policy frameworks, subsidies for fossil-based power generation, and access to financing. The 2014 MENA Solar Power Market Report shows that many countries in the region are now overcoming these challenges and beginning to realise the potential of solar power to play a key role in their future energy systems.”