Solar panels set up on rooftops overlooking Beirut International Airport in Aramoun, south of Beirut, Jan. 14, 2024. (Credit: João Sousa/L'Orient Today)
BEIRUT — Armed with a nascent understanding of solar technology, Mostapha al-Zein dove into the burgeoning solar energy industry alongside his cousin in mid-2021. Lebanon was in the midst of an energy crisis, exacerbated by the country’s economic turmoil.
Zein and his cousin’s modest venture quickly became a profitable one.
A surge in solar power adoption swept the nation between 2020 and 2023, offering a glimmer of hope amidst Lebanon’s widespread darkness.
But now that the market is saturated, the once-thriving solar businesses that sprouted amid Lebanon's crisis are shuttering, revealing the challenges of sustaining growth in Lebanon’s solar industry.
After the solar boom that the country witnessed, “the market will now adjust while companies that entered the market with no experience will shut down,” Pierre Khoury, president of the government’s Lebanese Center for Energy Conservation (LCEC), tells L’Orient Today.
“The boom happened on the level of individual installation,” he added — that is, households or small businesses getting solar panels to keep the lights on. Now, the sector is focusing on medium-sized projects, “in the hundreds of kilowatts.”
Zein and his cousin didn’t foresee the shift when they started their solar business in 2021. Without a brick-and-mortar storefront, the two of them, based in Beirut, would receive orders via phone and deliver them by van, mainly in the localities of “Bchamoun, Aley, Beirut, and Khaldeh,” he tells L’Orient Today.
At first, the quality of solar systems he was buying from suppliers, who were importing them from China, was high, and prices were acceptable, Zein says. He would resell the systems with profits of $200 to $500 per order or installation.
However, as time progressed, Zein says, “the same suppliers who we got used to started selling us subpar products,” resulting in a cascade of malfunctions and customer complaints.
A solar panel recently installed on the street dividing the Tripoli neighborhoods of Jabal Mohsen and Bab al-Tabbaneh. Feb. 21, 2024. (Credit: Joao Sousa/L'Orient Today)
Wholesale suppliers even “stopped giving us the right warranty.”
“This made our job too difficult,” he says. “By the end of 2022, it was a disaster for us.”
Zein wasn’t alone in starting to falter, as many inexperienced people started entering the market looking to make money.
The owner of the supermarket next door started selling solar, jokes energy expert and consultant Jessica Obeid.
She says that the fact that many of them are now shutting down “is good in the long term, because these businesses were not sustainable due to the [lack of] know-how.”
“In the immediate term,” Obeid adds, “they caused a lot of damage to the people they had installed the system for because they did not provide maintenance after they settled the sales.”
What’s next for solar?
With private buyers slowing down, what’s next for the solar panel industry in Lebanon? And who is going to be purchasing them, anyway?
For one, aid organizations and NGOs are now catching up to solar.
Wissam Daou is an engineer and founder of Dawtec, a company in Baabda that imports, sells and installs solar panel systems.
He tells L’Orient Today that for his company, “there is now a specific market, which is being fed by the funds coming from the European Union, USAID, UK Aid or from different countries… towards solar projects, because it is sustainable and can result in positive impacts on the economy and on the environment.”
“This constitutes a big part of my business today,” Daou adds.
At Dawtec, orders for solar panels for households and private individuals are 80 percent lower today compared to 2022, Daou says.
Private institutions like factories, hospitals and schools are self-financing solar projects, while many donor countries, including South Korea, Canada and the US, are financing public institutions and projects, says LCEC’s Khoury.
“These projects require adequate financing from established companies; it cannot be handled, neither financially nor technically, by small-scale inexperienced solar companies,” he adds.
“I was lucky to have entered the market at the right time and exited at the right time,” says Zein, who ended up leaving the solar business in late 2023.
“Some weren’t as lucky and bought equipment in bulk, which arrived after four to six months, by which time prices slumped and thus, caused them big losses.”
According to Zein, the profit today per solar system installation for small businesses, especially those that opened in the last two to three years is “around 10 percent only.”
The ones who are still in the business are “the ones taking on big projects or electricians handling the technical part of the installation with zero liability,” says Zein, who now works as a sales person in the tech industry, far from the solar power business.
Solar companies business slump
Meanwhile, “there is still a market for after sales and maintenance,” Daou says. Two to three years after installing a solar panel setup, batteries and inverters need to be replaced.
Daou notes that “the market for solar water heaters, which is less competitive compared to [photovoltaic] panels’ installations, remains stable.”
This is because it costs less — one would rather “spend $1,000 to provide the energy needed for solar water heating than to invest $5,000 or $4,000 [in PV systems] because sometimes that money is not available.”
Daou, however, says is “not worried about the business.”
“We have been in the business for 20 years now. We have a good solid infrastructure, we don't need to pay rent. We own the workshop. We own the showroom, we own the offices,” he says.
Unlike Daou, Ahmad al-Ahmad, a Syrian electrician who jumped on the bandwagon with a Lebanese colleague and started a solar company in Beirut during the crisis, has now turned back to being just an electrician because of the “slump” in the solar business. Sometimes he still gets calls from customers to fix their solar panel systems, but that no longer pays the bills.
Still, though, for the most part he doesn’t get much solar-related business anymore.
“Only if an extraordinary thing happens to the panels, like getting struck by a stray bullet or natural events, people won’t need us like before,” Ahmad says.
The electrician says he knows many who also entered this business have also turned to other jobs today.
“In every village, in every quarter, in every neighborhood, you’ll find that most households have solar panels now,” Ahmad says, attributing this saturation to the stagnation in orders.
Despite him leaving the business, Ahmad, who was making a profit of $200 to $300 from buying solar panels from wholesalers and selling them to households bought from wholesalers, says he “does not regret getting into this business, it was very successful and profitable but it had its period.”
