Abu Dhabi allows farms and rest houses to generate their own electricity using solar power

Farms, ranches and rest houses in Abu Dhabi will now be allowed to generate their own electricity using solar power, under a new self-supply framework rolled out by the emirate’s energy regulator.

The Solar (Photovoltaic) Energy Self-Supply Policy gives eligible agricultural customers the option to directly consume electricity generated on-site during the day and—where approved—use battery storage to extend those benefits into the evening.

“This policy is about enabling choice within a responsible regulatory framework,” Abdulaziz Alobaidli, Director General of Regulatory Affairs at the Department of Energy – Abu Dhabi, told Khaleej Times.

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“For the first time in a structured and scalable way, eligible customers are given the option, not the obligation, to generate part of their own clean electricity and manage their consumption more actively.”

The policy is being introduced in phases, starting with agricultural customers and owners of farms, rest houses and ranches — segments the Department says are particularly well suited to daytime solar generation.

“Our approach is deliberate and structured,” Alobaidli said. “We are implementing this policy in phases, beginning with the agricultural sector and owners of farms, rest houses and ranches, customer segments whose consumption profiles are particularly well-suited to daytime solar generation and energy storage integration.”

Not about quick savings

While the move opens the door for customers to reduce their electricity bills, the department stressed that the policy is not designed around guaranteed short-term savings.

“The level of savings will vary depending on several factors,” Alobaidli said, citing tariff category, consumption patterns and how much energy use can be shifted to daylight hours.

He added that customers who optimise daytime usage — particularly for energy-intensive activities such as irrigation, water heating and cooling — are more likely to improve the long-term performance of their systems.

“It is important to emphasise that this policy is not framed around guaranteed short-term bill reductions,” he said. “Rather, it is designed to encourage smarter energy behaviour, improve consumption efficiency, and provide consumers with greater control over their energy profile.”

Payback periods for solar and battery systems will depend on system size, technology choices and installation costs, though Abu Dhabi’s high solar irradiance supports long-term viability, the department said.

“This policy is not positioned as a short-term mechanism; it is a structured, long-term efficiency reform that delivers sustained value over the lifetime of the system,” Alobaidli said.

No power exports to the grid — for now

Under the current framework, customers will not be allowed to export excess electricity back to the grid or receive credits for surplus generation.

“At this stage, net metering or energy exports are not permitted under the policy,” Alobaidli said. “The policy is deliberately structured around self-supply and self-consumption, ensuring that solar systems complement, rather than replace, the grid.”

The department said this approach is intended to protect grid stability, ensure fair cost allocation and safeguard long-term infrastructure investment. Any future changes, including possible export mechanisms, would depend on system performance and regulatory readiness.

Easing pressure during peak demand

Halfway through its rollout, the policy is also expected to play a role in managing electricity demand — particularly during the summer months, when cooling drives peak consumption.

“In the summer months, Abu Dhabi experiences elevated electricity demand, particularly driven by cooling loads,” Alobaidli said. “The Solar (Photovoltaic) Energy Self-Supply Policy enables agricultural consumers and owners of farms and rest houses… to shift part of that demand away from central generation sources.”

The timing of the policy comes as electricity demand across the Gulf enters a phase of rapid growth, driven not just by population increases but by structural shifts such as data centres, artificial intelligence and wider electrification.

According to Dan Shugar, chief executive of renewable energy company NextPower, electricity demand across the GCC is now growing at double-digit rates in some markets.

“Demand for electricity has been growing around the world—in Saudi Arabia, in the UAE and in most major economies,” Shugar told Khaleej Times. “There’s more electrification, reindustrialisation, and population growth – but data centres and AI are now providing an enormous new source of electricity demand.”

As demand rises, solar paired with battery storage is emerging as one of the fastest ways to maintain grid reliability, he said.

“Solar is now the largest form of new power generation coming onto grids, combined with batteries,” Shugar said. “It’s the lowest cost, the fastest to install, and it carries the least amount of risk.”

The department said it expects the cumulative impact of self-supply to become “increasingly material” as adoption grows. By combining solar generation, battery storage and energy-efficiency measures, the policy aims to smooth demand patterns and strengthen system resilience during peak periods.

Licensing, standards and costs

Customers wishing to install solar systems must obtain a self-supply or instant electricity generation licence through the TAMM platform and comply with technical, safety and grid-connection standards. Installations must also be carried out by approved contractors.

“These requirements are not barriers; they are safeguards,” Alobaidli said. “They ensure reliability, protect consumers, and preserve system integrity as distributed generation increases.”

While the Department is not offering subsidies at this stage, it said the framework is built around regulatory enablement rather than financial incentives, with adoption and market response to be closely monitored.