Rooftop Solar PV Installations
Business Model Description
Establish and oversee rooftop solar PV systems across diverse sectors and locales, forming strategic collaborations with organizations to design and implement tailored PV arrangements on their rooftops. The business model derives revenue from the sale of comprehensive solar PV systems, encompassing panels, inverters, and related equipment.
Expected Impact
Catalyse sustainable development by reducing emissions, enhancing energy security, fostering economic growth, improving energy access, stimulating technological advancement, and enhancing grid resilience.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Albania: Durrës
- Albania: Tirana
Sector Classification
Renewable Resources and Alternative Energy
Development need
Albania is a net importer of energy, with an energy dependency rate of 28% in 2021. Merely 37% of domestic production was through renewables including hydro-generation, which accounted for 95% of domestic generating capacity, crude oil stood at 4%, and solar energy trailed behind at 1%. The over-reliance on hydropower renders energy security susceptible to climate change causing diminishing rainfall and increased water stress to take hold by 2040 (1, 2, 3, 40).
Policy priority
Albania's National Strategy for Development and European Integration (NSDEI) 2022-2030 aims to boost renewables to 54.4% of energy by 2030, transitioning the country to a net exporter of energy. Nationally Determined Contributions commits to an 11.5% reduction in CO2 emissions, equivalent to 708 Gg, by 2030 (4, 5, 14).
Gender inequalities and marginalization issues
Energy policies within households have a gendered impact, leading to limited economic opportunities, underrepresentation in decision-making, and low political participation for women. Men dominate the energy and energy-related sectors, making up nearly 85% of the workforce, while women only represent around 16% (1, 9).
Investment opportunities introduction
Albania's 2030 plan emphasizes renewable energy as crucial for a sustainable, green economy, aiming for a 42% renewable energy share. The country's abundant solar potential, exceeding 1,500 kWh/m2 annually and peaking at 1,753 kWh/m2, is particularly appealing to commercial entities amid escalating electricity prices (6, 7, 8).
Key bottlenecks introduction
The renewable energy industry faces obstacles primarily related to geographical positioning and land procurement difficulties, stemming from property rights complexities, resource fluctuations on various timescales, especially in solar energy, and the need for a skilled workforce knowledgeable about renewable technology applications (6).
Alternative Energy
Development need
In 2020, Albania's total greenhouse gas emissions reached 8,304 kilotons of CO2 equivalent. Despite active mitigation efforts, the emissions in this sector are expected to rise by 40.3% from 2016 to 2030. However, the Nationally Determined Contributions (NDC) plan aims to reduce emissions by 23.9% compared to business-as-usual through proposed mitigation measures (10, 11).
Policy priority
The Albanian National Energy and Climate Plan (NECP) aligns with the goal of reaching a 54.4% share of renewable energy in gross final energy consumption by 2030. The Voluntary National Review (VNR) demonstrates that 83% of the Sustainable Development Goals (SDGs) are interconnected with the pillars of the National Strategy for Development and Integration. Additionally, the Energy Strategy underscores the difficulties associated with addressing increasing energy demand and harmonizing policies with EU directives (5, 15, 12).
Gender inequalities and marginalization issues
Albania ensures energy access for its entire population; however, it grapples with regular power disruptions and elevated electricity costs, primarily affecting rural households and low-income communities. These challenges persist despite the introduction of financial mechanisms aimed at assisting vulnerable households in managing their energy expenses (13).
Investment opportunities introduction
Albania's solar energy capacity in the Total Primary Energy Supply (TPES) is projected to steadily rise, expanding from 16.5 ktoe in 2020 to 65.0 ktoe by 2040. The country encourages renewable energy investment via mechanisms like feed-in-tariffs, CfD schemes, net-metering, and customs duty exemptions for power plant construction (2, 5).
Key bottlenecks introduction
Albania's distribution grid, especially in Tirana, faces electricity instability and capacity constraints. Renewable investments are capital-intensive, dependent on energy prices. Heavy reliance on international suppliers, particularly Europe, hampers adaptability to changing energy patterns (2, 8).
Solar Technology and Project Developers
Pipeline Opportunity
Rooftop Solar PV Installations
Establish and oversee rooftop solar PV systems across diverse sectors and locales, forming strategic collaborations with organizations to design and implement tailored PV arrangements on their rooftops. The business model derives revenue from the sale of comprehensive solar PV systems, encompassing panels, inverters, and related equipment.
Business Case
Market Size and Environment
5% - 10%
Average solar insolation 1,500 kWh/m2 annually, and annual capture of about 2,200 kWh per square meter; prosumers reached 120 MW in capacity in 2023.
Albania's average solar insolation is 1,500 kWh/m2, peaking at 1,753 kWh/m2, allowing 2,200 kWh/m2 yearly capture. Its solar PV potential is 2,378 MW, generating 3,706 GWh annually (6, 7).
Enhanced electricity generation capacity for self-consumption has been attributed to a fall in energy consumption by 6.7% compared to the same period in 2023. Prosumers in Albania reached 120 MW in total capacity in 2023 (36).
Albania’s technical potential for the deployment of solar PV is estimated at 2,378 MW, with a production of 3,706 GWh annually (6).
Indicative Return
15% - 20%
Commercial rooftop installations can yield an internal rate of return (IRR) between 15-20% according to a local supplier of solar power equipment and installation services (19).
Investment Timeframe
Short Term (0–5 years)
A solar PV power generation system with a capacity of 168 kWp installed at the UPT building in Tirana has yielded a payback period of just 3.9 years (21).
Commercial solar installations produce relatively shorter payback periods of 3 to 5 years, in contrast, the residential sectoral faces a payback period estimation of approximately 6 to 7 years, aligning with the broader market trends (19).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Capital - CapEx Intensive
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Albania's rich renewable energy potential faces funding and price challenges. Rising electricity costs offer opportunities for rooftop PV integration, promising quick returns and savings. Despite further need for energy efficiency improvements, the country's energy intensity is commendably lower at 2.5 GJ/USD 1,000 in 2019, outperforming regional and EU averages (3, 4, 5, 38, 40).
Albania's energy systems face vulnerability to climate impacts due to heavy reliance on hydropower, including reduced rainfall, and the country's projected water stress by 2040. This reliance also raises concerns about water scarcity risks and environmental issues like water quality degradation, flood risks, and disruption of natural ecosystems (1, 2, 3).
Albania aims to decrease greenhouse gas emissions by 20.9% between 2016 and 2030, per its Nationally Determined Contributions (NDC). Challenges remain, including heavy reliance on forest emissions, limited renewable resource development, and administrative constraints (3, 23).
Renewable energy faces spatial constraints, land acquisition complications due to property rights, and variable solar availability. Addressing ground installation land concerns can be tackled by emphasizing rooftop solutions (8, 39).
Gender & Marginalisation
In Albania's energy sector, men comprise about 85% of the workforce, while women make up just 16%. This gender imbalance suggests a missed opportunity for tapping into a broader labor and skills pool, a trend similar to the EU-28 (1).
Albania's energy sector exhibits gender disparities and lacks gender-inclusive policies, hindering progress in addressing energy poverty. The elderly population faces challenges as electricity costs for heating can consume a substantial portion of their pension income (14).
Expected Development Outcome
Commercial and residential rooftop solar PV installations can enhance energy security and reduce carbon emissions, mitigating frequent power interruptions and high electricity prices, particularly in rural areas, while promoting responsible consumption and production.
Enhancing investments in solar PV at a residential and industrial scale will help overcome the challenges of limited funding availability for renewable energy developments, unlocking Albania's considerable renewable energy potential, enhance energy efficiency, reduce distribution losses, and bring energy intensity levels more in line with EU standards.
Electricity collection through commercial and residential rooftop installations will reduce transmission technical electricity losses, lowering energy utility costs for prosumers.
Gender & Marginalisation
Rooftop solar PV technology including home systems will improve access of rural communities to reliable and clean energy, improving overall comfort and living standards.
Enhanced adoption of rooftop solar energy, and prosumer schemes will promote gender-inclusive energy policies while addressing disparities, combating energy poverty, and improving living conditions for the elderly by reducing the high costs of heating, enhancing their financial well-being.
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
7.1.2 Proportion of population with primary reliance on clean fuels and technology
Share of renewable energy in gross final energy consumption in Albania was 41.3% in 2021 (13).
Percentage of population with primary reliance on clean fuels and technology recorded as 37.55% in 2020 (41).
The target for the renewable energy share in the total final energy consumption in Albania is 54.4% by 2030, as outlined in the National Strategy for Development and European Integration 2022-2030 (6).
The long-term objective for this indicator is a value of 100 at a global scale (42).
12.a.1 Installed renewable energy-generating capacity in developing countries (in watts per capita)
The capacity of renewable energy generating power plants in Albania, including hydropower, was recorded at 2109 MW in 2019, which is approximately 0.758 watts per capita (population of Albania is 2,775,634 in 2022/ watts per capita = 2109 MW / 2,775,634 ≈ 0.000759 MW ). (2, 14)
A total of 16.506 MW of renewable energy capacity is targeted for installation in Albania by 2030, and the population is projected to be 2,933,530 in 2030 (2, 14).
13.2.2 Total greenhouse gas emissions per year
Albania's total greenhouse gas emissions in 8,304 kilotons of CO2 equivalent in 2020. (15)
Albania's Nationally Determined Contributions commits to an 11.5% reduction in CO2 emissions, equivalent to 708 Gg, by 2030 (11).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
High recycling costs and the utilization of heavy metals can lead to environmental harm when PV modules are not properly recycled, potentially causing soil and water pollution (26).
Construction noise and vibrations can harm children and the elderly. Furthermore, dust and particulate matter may rise, affecting residents' health (27).
Gender inequality and/or marginalization risk: Women's underrepresentation in energy sector decision-making may lead to gender-neutral policies, hindering gender equality efforts (14).
Impact Risks
A significant risk arises from spatial and visual constraints, including aesthetic concerns and the possibility of tree shading causing obstructions to the intended energy generation and impact (22).
Distribution network issues, grid capacity constraints, and poor planning can harm the benefits of solar PV farms, impacting consumers and communities (6).
Inadequate training of the local workforce and limited communication with stakeholders create potential risks that could impede their effective integration into the renewable energy sector, constraining intended positive impact (6).
Gender inequality and/or marginalization risk: Limited awareness on gender sensitive economic growth can hinder workforce balance and carbon neutrality (28).
Impact Classification
What
Rooftop solar PV developments contributes to a reduction in greenhouse gas emissions by generating clean and renewable energy, and energy cost savings for businesses and households, improving economic sustainability.
Who
Albanian households, businesses, and the environment benefit from affordable and clean energy through rooftop solar installations.
Risk
Risks include visual constraints, grid capacities, and workforce training and communication challenges, impacting renewable energy integration.
Contribution
In alignment with urban development, rooftop solar installations transform Albanian cityscapes into sustainable energy hubs, promoting local efficiency and a green culture.
How Much
Albania aims to increase rooftop solar capacity to support its renewable energy targets of 42% renewable energy and an 11.5% CO2 reduction (5).
Impact Thesis
Catalyse sustainable development by reducing emissions, enhancing energy security, fostering economic growth, improving energy access, stimulating technological advancement, and enhancing grid resilience.
Enabling Environment
Policy Environment
National Strategy for Development and European Integration 2022-2030: aims to significantly increase the share of renewable sources in final energy consumption, aiming to achieve a share of 54.4% by 2030. One of the key steps toward this goal is boosting electricity generation capacity from solar. The implementation of rooftop solar power plants is projected to result in GHG savings of 6.9 ktCO2eq by 2035 and 1.2 ktCO2eq by 2040. Furthermore, the strategy emphasizes supporting private investments in the sector, strengthening energy transmission infrastructure, promoting energy efficiency in the residential housing sector, and transitioning the country into a net energy exporter (14).
National Energy and Climate Plan of the Republic of Albania, 2021: promotes a continuous expansion of its solar energy capacity as part of the Total Primary Energy Supply (TPES), with an anticipated rise from 16.5 ktoe in 2020 to 65.0 ktoe by the year 2040, including through rooftop solar installations envisioned to produce 6.9 by 2035 and 1.2 by 2040 GHG savings in ktCO2eq (5).
Albania National Energy Strategy 2018-2030: aligns with national and European Green Deal goals, emphasizing clean energy, sustainable construction, mobility, and pollution reduction, targeting a 42% renewable energy share and a 15% reduction in energy consumption by 2030. Key measures include improving energy efficiency, increasing the share of renewables and other indigenous energy sources (29).
The Voluntary National Review (VNR), 2018: highlights a robust 83% linkage between SDGs and NSDI II pillars. SDG 7, emphasizing affordable and sustainable energy, while highlighting challenges involving managing escalating energy demand and aligning policies with EU directives (13).
Financial Environment
Financial incentives: The Renewable Energy Law offers financial incentives such as Feed-in Tariffs, Power Purchase Agreements for self-producers, while also including those that are located in the same building, allowing pricing on an annual basis as opposed to monthly (20, 31, 37, 19).
Fiscal incentives: Renewable energy technologies are exempted from custom duty, with VAT to be cancelled for solar and wind energy power equipment, reducing the financial burden on developers and encouraging the adoption of renewable technologies (31, 34).
Other incentives: Albania secured a EUR 100 million policy loan from KfW and AFD for sector reforms and renewable energy transition. Additionally, the Albanian Power Exchange (ALPEX) was formed to manage and administer the organized electricity market on a day-ahead basis (33, 35).
Regulatory Environment
Law no.24/2023,Promotion of Renewable Energy Use, April 2023: replaces Law no. 7/2017 replaces Law no. 7/2017 and aligns with EU standards. It promotes renewable energy, introduces support schemes, and sets guidelines for self-producers, operators, network access, and origin guarantees (30).
The New Renewable Energy law promoting RES production by self-producers up to a capacity of 500 kilowatts, which are defined more broadly so as to comprise any final consumer that produces renewable electricity for its own consumption and that can store or sell self-produced renewable electrical energy, provided these activities do not constitute their main commercial or professional activity, and introduces new rules regarding self-producers of re-renewable energy located in the same building, including multi-apartment blocks (37).
VAT law no. 92/2014, 2015: aligned with EU Directive, introduces new definitions of taxable person, taxable supply and taxable basis while setting exemptions or reduced rates for specific goods or services, or specific schemes tailored for particular projects (31, 32).
Law no. 55/2015 on Strategic Investments, 2016: aims to increase Albanian and foreign strategic investments in the sectors of the economy considered as strategic sectors, through the establishment of special favourable administrative procedures, mitigating and support services to the investors (33).
Marketplace Participants
Private Sector
EuroElektra, Lufra, Lika, PMG Xhindoli.
Government
Ministry of Infrastructure and Energy, State Agency for Strategic Programming and Aid Coordination, Ministry of Economy, Culture, and Innovation, Albanian Investment Development Agency, Albanian Power Exchange, Albania Investment Council, Albanian Investment Corporation.
Multilaterals
European Bank for Reconstruction and Development (EBRD), European Union, International Energy Agency, United Nations Development Programme (UNDP), GEF (Global Environment Facility), ESPN (European Social Policy Network), IRENA (International Renewable Energy Agency).
Non-Profit
Women Engage for a Common Future (WECF) International, AEA Albania Energy Association, Albanian Renewable Energy Association (AREA), Resource Environmental Center Albania (REC Albania), Foreign Investors Association of Albania (FIAA), Connecting Natural Values & People (CNVP).
Target Locations
Albania: Durrës
Albania: Tirana
References
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- (2) German Energy Agency (DENA). 2021. Factsheet RE in Albania. https://unece.org/sites/default/files/2021-07/UNECE-RE_Uptake_Factsheet_Albania.pdf
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