Surviving Economic Mayhem in Egypt Through Solar & Wind Energy

Wednesday, 17th May 2017

With the growing population and the turbulent economy, Egypt is struggling to provide for the people it shelters. Wrestling with the circumstances, a company specialized in solar energy applications, strives to survive the situation – and thrives. Invest-Gate looks into the solar energy as a mean to sustainable Egypt.

In situations like these, there is only one answer: renewable energy. “I always say that when God gave the Gulf States petroleum, he gave Egypt two things: solar and wind energy,”  Energy Engineer and COO of SolarShams Faissal Eissa tells Invest-Gate.

SolarShams is a startup that works with wind and solar energy to provide solar water heating and solar electricity generating. It is a specialized engineering company in solar application businesses operating for both institutions and individuals.   

Eissa continues to explain how Egypt could benefit from these energies just as the Gulf benefited from petroleum. “We could use the energy to generate electricity and export it, just like Saudi Arabia exports petroleum and gains good income in return,” he suggests.

“Solar panels are affordable if you calculate it correctly.” Eissa points out that it is a capital-intensive piece of equipment; almost like paying for the energy you consumed all at once. With the price of a single solar heater you can buy several electric ones, “so everyone thinks it is more expensive, but they do not take into account the electricity that the electric heater will consume and that they will pay for eventually.”

If consumers calculate it economically, on the long run of 15 to 20 years with zero-running cost, they will find that solar heaters are far less costly than the electric ones.

“The use of renewable sources of energy should be a priority. This includes the use of energy generated by wind and solar – photovoltaic (PV) and concentrated solar panels,” Senior Advisor to the Minister of Environment Hussein Abaza tells Invest-Gate. “This will go a long way in resolving Egypt’s energy problem,” he adds.

Germany has been adopting the renewable energy solution for years now. Eissa finds Germans so successful at how they implement this solution in real life; and Egyptian energy engineers in both private and public sectors consider the country the model of the field. “Germans have systems and incentives in solar and wind that could turn each and everyone to an investor,” Energy Engineer Faissal Eissa tells Invest-Gate.

According to the German administration, young entrepreneurs in the field are offered a decrease in taxes and an ease in making the project work and succeed. “If you are a farmer, and you put a wind turbine, they will give you an incentive and lower taxes on the vegetables you sell,” Eissa says.

He further explains that it all pays back to Germany on the long run; since they became experts in this field, if anyone needs consultancy, machinery, equipment, training or even lawyers for the contracts – since these contracts are very technical – they turn to Germany for help.

Enterprises and startups, like SolarShams, face many challenges in Egypt. On the macro level, the situation in the country is very difficult environment for a startup to grow and move fast. “The state is not encouraging SMEs at all; they cannot be financially backed from banks unless you have a positive ‘Profit and Loss’ account for the last two years, which is ironic because by definition, a startup means that is still building up… so how would I have a ‘Profit and Loss’ account that would be positive for the last two years!” Eissa sarcastically comments. “It does not make sense. Moreover, no company in the world starts off as a winner,” Eissa states.

Despite of the aforementioned forks in the road, SolarShams has managed to cross some milestones ever since its establishment in 2014, including the national project initiated by the Egyptian government in Aswan two years ago, which aims to have the biggest PV in the world generating up to around 2,000 MW. They qualified international companies to work on this project; and SolarShams are among the very few Egyptian companies that received the qualifications.

“Our mission is that everyone would be able to afford this solution, not only in terms of money, but also engineering, applicability, and availability,” Eissa concludes.

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