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The approach for Abu Dhabi’s solar energy: Centralised or Decentralised

Author

Listed:
  • McCloskey, PJ
  • Malheiros Remor, Rodrigo

Abstract

This paper evaluates the economic viability of decentralised solar systems in Abu Dhabi. By analysing levelised cost of electricity (LCOE), net present value (NPV), and internal rate of return (IRR) across customer groups, it finds that while rooftop solar generation is not yet cost-effective for heavily subsidised sectors, it remains viable for industrial and commercial users. The study suggests that subsidy reform could significantly improve the financial appeal of decentralised systems, aligning with Abu Dhabi’s decarbonisation targets under the UAE Energy Strategy 2050.

Suggested Citation

  • McCloskey, PJ & Malheiros Remor, Rodrigo, 2025. "The approach for Abu Dhabi’s solar energy: Centralised or Decentralised," MPRA Paper 124740, University Library of Munich, Germany, revised 13 May 2025.
    • Handle: RePEc:pra:mprapa:124740
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    File URL: https://mpra.ub.uni-muenchen.de/124811/1/MPRA_paper_124811.pdf
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    References listed on IDEAS

    as
    1. Mayyas Alsalman & Vian Ahmed & Zied Bahroun & Sara Saboor, 2023. "An Economic Analysis of Solar Energy Generation Policies in the UAE," Energies, MDPI, vol. 16(7), pages 1-25, March.
    2. Thapar, Sapan, 2022. "Centralized vs decentralized solar: A comparison study (India)," Renewable Energy, Elsevier, vol. 194(C), pages 687-704.
    3. Idel, Robert, 2022. "Levelized Full System Costs of Electricity," Energy, Elsevier, vol. 259(C).
    4. Tholkappiyan Ramachandran & Abdel-Hamid I. Mourad & Fathalla Hamed, 2022. "A Review on Solar Energy Utilization and Projects: Development in and around the UAE," Energies, MDPI, vol. 15(10), pages 1-27, May.
    5. Abdullahi Abubakar Mas’ud & Asan Vernyuy Wirba & Saud J. Alshammari & Firdaus Muhammad-Sukki & Mu’azu Mohammed Abdullahi & Ricardo Albarracín & Mohammed Ziaul Hoq, 2018. "Solar Energy Potentials and Benefits in the Gulf Cooperation Council Countries: A Review of Substantial Issues," Energies, MDPI, vol. 11(2), pages 1-20, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    renewable energy; solar energy; decentralised solar; centralised solar; LCOE; Abu Dhabi;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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