Since its energy and financial systems collapsed in 2019–21, Lebanon has experienced a rapid solar boom—with solar production increasing tenfold in just a few years—that has profoundly altered and decentralized the country’s energy system. This boom has seemingly plateaued, but with a new government and a $250 million World Bank loan, the country may have a window of opportunity to kick-start the energy transition and reform the power sector. But as energy expert Marc Ayoub explains in this Q&A with Century International fellow Zachary Cuyler, significant challenges remain—common to other countries with similarly fragmented grids like Syria and Iraq—in ensuring that people in Lebanon have equitable access to affordable electricity.
Zachary Cuyler:How did previous governments deal with Lebanon’s energy crisis?
Marc Ayoub: Since 2019, Lebanon has witnessed a financial collapse, a currency devaluation, and a series of compounded crises that have impacted most sectors of the economy. Electricity was one of the first sectors to reveal the depth of the crisis, particularly in terms of the amount of financial support it needed and the challenge of finding fuel. The crisis caused a severe foreign currency shortage—a shortage that has affected much of the economy but especially electricity, because the sector was dependent on the importation of expensive diesel and fuel oil for Lebanon’s power plants.
In this context, previous governments have had to take a crisis management approach to the grid, and to the energy sector in general. The main goal was to avoid blackouts and a complete collapse of the grid. Crisis management entailed a very severe rationing program by Electricité du Liban (EDL), the national utility, which aimed to stabilize the grid while providing citizens with a minimum of electricity. But even before the crisis, EDL was providing at most twelve hours of electricity per day outside of Beirut. But between 2021 and 2023, this fell to at most one to three hours a day.
Throughout the crisis, the government’s primary objective was to provide a continuous supply of fuel to the power sector without paying for it from the national budget, which was in dire shape. So, Lebanon became dependent on a government-to-government agreement signed in 2021 with Iraq to supply around 1 million tons of high-sulfur fuel oil with payments deferred twelve months into the future. The agreement was very helpful—it deepened EDL’s debt, but eventually achieved around six hours of electricity per day nationwide.
At the same time, this crisis-management approach meant that the grid didn’t get the maintenance it needed, leading to loss of electricity during transmission and requiring more fuel consumption and power generation to get those minimal hours of supply.
The crisis also led to the removal of subsidies on all commodities, including electricity and diesel, which has made electricity from both EDL and also from private generators very expensive and dollarized. Thus, citizens are currently paying a high rate for electricity from EDL for a few hours of supply, and they’re also paying a dollarized rate for private generator subscriptions if they don’t have solar.
The Boom Slows
Zack:What is the state of Lebanon’s renewable energy transition, and what are some of the main bottlenecks slowing it down?
Marc: Although there were attempts between 2010 and 2020 to push the renewable energy transition through the implementation of a few projects that were donor-led, renewables weren’t yet competitive because everything was subsidized. And although the government was taking administrative and regulatory steps in the direction of transition, there was no momentum until the crisis.
But the crisis hit people in Lebanon hard, through the shortage of foreign currencies; the EDL rationing of electricity; the removal of subsidies; and the rise of EDL and diesel generator rates. People in Lebanon can no longer afford electricity from the state or from private generators, so they’ve started looking for alternatives.
From 2021 to 2024, solar boomed in Lebanon, with an estimated tenfold increase in installed capacity—to between 1,200 and 1,300 megawatts of electricity—coming from decentralized systems on rooftops and in municipalities.
In 2021, as the crisis deepened, people realized the importance of renewable energy, particularly solar energy, and the country saw a huge increase in the installation of solar panels and solar-plus-battery-storage systems on their rooftops. From 2021 to 2024, Lebanon witnessed a solar boom—an estimated tenfold increase in installed capacity, to between 1,200 and 1,300 megawatts of electricity coming from decentralized systems on rooftops and in municipalities.
But now this boom is slowing down because of a few bottlenecks. The first bottleneck is cost: these systems are expensive, requiring at least $4,000 or $5,000 for a small system of four or five solar panels plus batteries. This has limited access to solar energy to people with access to capital, whether from savings or remittances. The second bottleneck is space, and those who have access to both capital and rooftop space have already installed panels on their roofs. For this reason, international donors have started thinking about going beyond the residential level and supporting municipal or community-based projects, and this is where the transition is heading. The third bottleneck is quality: there were many new entrants into the solar market because of the boom—new companies, new electricians, and instant experts—so some of the systems that have been installed haven’t been maintained well and will cause problems soon.
There’s another related set of issues: Once panels and batteries installed in 2021 start expiring, we’ll have to figure out how to recycle or dispose of them. And a lot of panels have also been damaged during Israel’s ongoing bombing campaign against Lebanon.
A final major future bottleneck, when thinking about the system at the national level, is that some people who have installed solar panels have become independent of both EDL and private generators. While this energy independence is good for them, it creates problems at the level of the national grid. On the supply side, it results in electricity losses: when batteries are full, excess solar energy is lost if it can’t be fed into the grid. EDL doesn’t currently have a net-metering system in place that would allow solar energy to be fed into the grid, and, in any case, it doesn’t have the kind of stable grid that could redistribute this energy effectively, so much of the solar-generated electricity in Lebanon is simply lost. We will also need to see how these distributed systems will affect the demand side: factories, commercial enterprises, and homes that are self-sufficient don’t demand electricity from EDL, hurting the utility’s bottom line, and it becomes difficult to plan and invest in a national grid without demand growth.
An Energy Reform Backlog
Zack:What kinds of institutional reforms are underway to remake the sector and integrate these distributed systems?
Marc: Law 462 of 2002 governs the electricity sector but has never been implemented. This law calls for the appointment of the Electricity Regulatory Authority (ERA). By law, the ERA should be an independent authority with responsibilities having to do with distribution, generation, rates, licensing power plants and large solar and wind installations, and related matters. The Minister of Energy and Water will be responsible for setting the sector’s overall vision or strategy, but every executive decision in the electricity sector will be made by the ERA—things like the licensing of new projects or to rate questions. So, the minister will still set the vision, and the ERA will execute it.
The responsibility is huge. If Lebanon manages to appoint the ERA in the coming months, it will be the first step toward the implementation of this law.
Law 462 also calls for the unbundling of the sector in terms of distribution, generation, and transmission. EDL has been mandated to be transformed into a national transmission company, while generation and distribution will be handled by public-private partnerships with strategic partners.
EDL has been facing the challenges that I’ve already mentioned since the onset of the crisis, but we also need to add that the August 4, 2020 Beirut port blast destroyed EDL’s headquarters. Most employees based there were moved from the main building to different offices elsewhere. EDL is also facing a challenge when it comes to operating the current fleet of assets, as well as resource and financial problems. However, EDL is now making profits for the first time in years, which it could use toward other projects or investments.
But just because EDL has stopped losing money doesn’t mean it’s up to the looming task—a daunting one—of managing future reforms. More renewables will likely not be installed unless they can feed into the grid, and that will require net-metering through EDL. The grid also has to be upgraded to be smarter and stronger, and to transmit power between regions. So, it is currently both the solution and the bottleneck, because you cannot imagine any whole-of-system approach for the sector without tackling EDL.
Some people say that we need to shut down EDL and establish a new company, while others argue that we should reform what we have, because we already have the basic structure in place. But any future version of EDL will need to be a publicly owned, profit-making company that sets affordable rates for consumers. It should have a strong grid and should have the capacities to pursue the energy transition. But at the moment, the utility doesn’t have the resources or the know-how. The EDL workforce is aging toward retirement, and the last significant hires were more than ten years ago, maybe twenty. The sector is already partially privatized, and a lot of the people who understood things like distribution have moved to these new private companies.
EDL has its work cut out: it will need people who can maintain current and future assets, manage the grid, and upgrade it to a smarter grid to integrate renewables that will drive down the price of electricity. You need a future-oriented group of people who can guide Lebanon’s energy transition. And as with the country as a whole, there’s a window of opportunity for EDL.
Caption: Private generators provide vital backup to Lebanon’s decrepit power grid on October 11, 2021 in Beirut. Source: Marwan Tahtah/Getty Images
International Support Could Make a Difference
Zack: What kind of support is Lebanon receiving for these efforts?
Marc: A loan from the World Bank was approved just a few months ago. It has been in discussion for the past two years, and the main rationale behind it is to replace a stalled plan to support Lebanon in importing gas from Egypt and electricity from Jordan via Syria.
This is a $250 million loan—not a grant—to help with several projects and structural administrative issues. The projects include a 150-megawatt solar farm in the Beqaa Valley, the reconstruction of the EDL national control center in the building that was damaged by the port explosion, and the rehabilitation of some hydropower plants. On the administrative side, the loan will support EDL, first through financial recovery or cash flow management in terms of priority of payments, and dealing with independent power producers, resources, consultancies, and operation and maintenance for power plants. The loan will also support the automation of billing and collection to reduce what are called “nontechnical losses”—consumers not paying their bills.
Further, the loan will support the establishment of a renewable energy department within EDL (as stipulated by Renewable Energy Law 318 of 2023) to manage all the renewable energy projects. EDL is already starting to launch some positions and to employ some people so that they can kick-start these projects. All of this could put the utility and the sector as a whole on the path to recovery.
Equitable Access Still Out of Reach
Zack: With these processes underway, what are the prospects for universal, equitable access to electricity in Lebanon?
Marc: Unfortunately, the situation is so dire that you cannot hope to achieve equitable access overnight, but you can work toward these goals. But it’s very difficult to even talk about these things, given the current collapse, the crisis, dollarization, the electricity supply, and the other problems that Lebanon is facing.
The path is long and bumpy. The country is so fragile in terms of government stability—elections next year could replace this government and derail everything we’ve talked about so far. There’s little continuity because of politicized decision-making and interference in such contexts.
But the quick answer to your question is that Lebanon first needs to depoliticize the energy sector, such that major decisions are made by experts with long-term visions rather than ministers or political appointees who will eventually leave office.
Second, Lebanon needs to rethink the design of the power system to account for the realities of the post-crisis era—especially the solar boom—which have meant a reduction in demand as people have become more energy-efficient and independent. Electricity also has to be made more affordable by reducing the cost of generation so that you can lower the rate for consumers.
And third is to support the transition to renewable energy so that you can reach your climate goals while reducing local environmental impacts and improving energy accessibility and affordability.
You are always in a crisis in this country, and there will never be a time when you are in a good position to plan, but following these guidelines while continuing to manage the crisis will help.
Depoliticization Is a Political Choice
Zack:Given that the relevant actors—politicians and parties, businesspeople connected to the political class, international donors, the World Bank—all have their own competing interests, how can the sector be depoliticized?
Marc: Everyone has their interests, but decision-makers can keep the politics out of the sector by not appointing political appointees, not listening to the input of political parties, and trying to at least insulate the technical discussion from political interference.
But you cannot really eliminate politics—if you privatize the grid or anything else, even that is a political decision. Everything is political, but ultimately you have to aim for affordable and equitable access to electricity without being distracted by political calculations. I know this might be a dream for a country like Lebanon, but maybe the only positive thing about the crisis is that people are now understanding the damage done by narrow partisan politics when they see the state of their roads, telecommunications, and electricity. They have come to understand how important it is to make unbiased, nonpolitical decisions in such contexts. Depoliticizing energy is a political choice that decision-makers have to make.
This Q&A is part of “Networks of Power,” a project led by Century International fellow Zachary Cuyler, which aims to map Lebanon’s evolving energy sector and assess the prospects for energy justice
Header Image Caption: A single apartment in Burj Hammud neighborhood is lit up during a power outage on August 2, 2021 in Beirut. Source: Roudy Doumit/Getty Images
Marc Ayoub is an energy policy researcher and consultant, currently conducting his PhD at the University of Galway in Ireland. He is also an associate fellow at the AUB Fares Institute and a former nonresident fellow on energy and climate issues at the Tahrir Institute for Middle East Policy.
The Future of Lebanon’s Unlikely Solar Revolution
Since its energy and financial systems collapsed in 2019–21, Lebanon has experienced a rapid solar boom—with solar production increasing tenfold in just a few years—that has profoundly altered and decentralized the country’s energy system. This boom has seemingly plateaued, but with a new government and a $250 million World Bank loan, the country may have a window of opportunity to kick-start the energy transition and reform the power sector. But as energy expert Marc Ayoub explains in this Q&A with Century International fellow Zachary Cuyler, significant challenges remain—common to other countries with similarly fragmented grids like Syria and Iraq—in ensuring that people in Lebanon have equitable access to affordable electricity.
Zachary Cuyler: How did previous governments deal with Lebanon’s energy crisis?
Marc Ayoub: Since 2019, Lebanon has witnessed a financial collapse, a currency devaluation, and a series of compounded crises that have impacted most sectors of the economy. Electricity was one of the first sectors to reveal the depth of the crisis, particularly in terms of the amount of financial support it needed and the challenge of finding fuel. The crisis caused a severe foreign currency shortage—a shortage that has affected much of the economy but especially electricity, because the sector was dependent on the importation of expensive diesel and fuel oil for Lebanon’s power plants.
In this context, previous governments have had to take a crisis management approach to the grid, and to the energy sector in general. The main goal was to avoid blackouts and a complete collapse of the grid. Crisis management entailed a very severe rationing program by Electricité du Liban (EDL), the national utility, which aimed to stabilize the grid while providing citizens with a minimum of electricity. But even before the crisis, EDL was providing at most twelve hours of electricity per day outside of Beirut. But between 2021 and 2023, this fell to at most one to three hours a day.
Throughout the crisis, the government’s primary objective was to provide a continuous supply of fuel to the power sector without paying for it from the national budget, which was in dire shape. So, Lebanon became dependent on a government-to-government agreement signed in 2021 with Iraq to supply around 1 million tons of high-sulfur fuel oil with payments deferred twelve months into the future. The agreement was very helpful—it deepened EDL’s debt, but eventually achieved around six hours of electricity per day nationwide.
At the same time, this crisis-management approach meant that the grid didn’t get the maintenance it needed, leading to loss of electricity during transmission and requiring more fuel consumption and power generation to get those minimal hours of supply.
The crisis also led to the removal of subsidies on all commodities, including electricity and diesel, which has made electricity from both EDL and also from private generators very expensive and dollarized. Thus, citizens are currently paying a high rate for electricity from EDL for a few hours of supply, and they’re also paying a dollarized rate for private generator subscriptions if they don’t have solar.
The Boom Slows
Zack: What is the state of Lebanon’s renewable energy transition, and what are some of the main bottlenecks slowing it down?
Marc: Although there were attempts between 2010 and 2020 to push the renewable energy transition through the implementation of a few projects that were donor-led, renewables weren’t yet competitive because everything was subsidized. And although the government was taking administrative and regulatory steps in the direction of transition, there was no momentum until the crisis.
But the crisis hit people in Lebanon hard, through the shortage of foreign currencies; the EDL rationing of electricity; the removal of subsidies; and the rise of EDL and diesel generator rates. People in Lebanon can no longer afford electricity from the state or from private generators, so they’ve started looking for alternatives.
In 2021, as the crisis deepened, people realized the importance of renewable energy, particularly solar energy, and the country saw a huge increase in the installation of solar panels and solar-plus-battery-storage systems on their rooftops. From 2021 to 2024, Lebanon witnessed a solar boom—an estimated tenfold increase in installed capacity, to between 1,200 and 1,300 megawatts of electricity coming from decentralized systems on rooftops and in municipalities.
But now this boom is slowing down because of a few bottlenecks. The first bottleneck is cost: these systems are expensive, requiring at least $4,000 or $5,000 for a small system of four or five solar panels plus batteries. This has limited access to solar energy to people with access to capital, whether from savings or remittances. The second bottleneck is space, and those who have access to both capital and rooftop space have already installed panels on their roofs. For this reason, international donors have started thinking about going beyond the residential level and supporting municipal or community-based projects, and this is where the transition is heading. The third bottleneck is quality: there were many new entrants into the solar market because of the boom—new companies, new electricians, and instant experts—so some of the systems that have been installed haven’t been maintained well and will cause problems soon.
There’s another related set of issues: Once panels and batteries installed in 2021 start expiring, we’ll have to figure out how to recycle or dispose of them. And a lot of panels have also been damaged during Israel’s ongoing bombing campaign against Lebanon.
A final major future bottleneck, when thinking about the system at the national level, is that some people who have installed solar panels have become independent of both EDL and private generators. While this energy independence is good for them, it creates problems at the level of the national grid. On the supply side, it results in electricity losses: when batteries are full, excess solar energy is lost if it can’t be fed into the grid. EDL doesn’t currently have a net-metering system in place that would allow solar energy to be fed into the grid, and, in any case, it doesn’t have the kind of stable grid that could redistribute this energy effectively, so much of the solar-generated electricity in Lebanon is simply lost. We will also need to see how these distributed systems will affect the demand side: factories, commercial enterprises, and homes that are self-sufficient don’t demand electricity from EDL, hurting the utility’s bottom line, and it becomes difficult to plan and invest in a national grid without demand growth.
An Energy Reform Backlog
Zack: What kinds of institutional reforms are underway to remake the sector and integrate these distributed systems?
Marc: Law 462 of 2002 governs the electricity sector but has never been implemented. This law calls for the appointment of the Electricity Regulatory Authority (ERA). By law, the ERA should be an independent authority with responsibilities having to do with distribution, generation, rates, licensing power plants and large solar and wind installations, and related matters. The Minister of Energy and Water will be responsible for setting the sector’s overall vision or strategy, but every executive decision in the electricity sector will be made by the ERA—things like the licensing of new projects or to rate questions. So, the minister will still set the vision, and the ERA will execute it.
The responsibility is huge. If Lebanon manages to appoint the ERA in the coming months, it will be the first step toward the implementation of this law.
Law 462 also calls for the unbundling of the sector in terms of distribution, generation, and transmission. EDL has been mandated to be transformed into a national transmission company, while generation and distribution will be handled by public-private partnerships with strategic partners.
EDL has been facing the challenges that I’ve already mentioned since the onset of the crisis, but we also need to add that the August 4, 2020 Beirut port blast destroyed EDL’s headquarters. Most employees based there were moved from the main building to different offices elsewhere. EDL is also facing a challenge when it comes to operating the current fleet of assets, as well as resource and financial problems. However, EDL is now making profits for the first time in years, which it could use toward other projects or investments.
But just because EDL has stopped losing money doesn’t mean it’s up to the looming task—a daunting one—of managing future reforms. More renewables will likely not be installed unless they can feed into the grid, and that will require net-metering through EDL. The grid also has to be upgraded to be smarter and stronger, and to transmit power between regions. So, it is currently both the solution and the bottleneck, because you cannot imagine any whole-of-system approach for the sector without tackling EDL.
Some people say that we need to shut down EDL and establish a new company, while others argue that we should reform what we have, because we already have the basic structure in place. But any future version of EDL will need to be a publicly owned, profit-making company that sets affordable rates for consumers. It should have a strong grid and should have the capacities to pursue the energy transition. But at the moment, the utility doesn’t have the resources or the know-how. The EDL workforce is aging toward retirement, and the last significant hires were more than ten years ago, maybe twenty. The sector is already partially privatized, and a lot of the people who understood things like distribution have moved to these new private companies.
EDL has its work cut out: it will need people who can maintain current and future assets, manage the grid, and upgrade it to a smarter grid to integrate renewables that will drive down the price of electricity. You need a future-oriented group of people who can guide Lebanon’s energy transition. And as with the country as a whole, there’s a window of opportunity for EDL.
International Support Could Make a Difference
Zack: What kind of support is Lebanon receiving for these efforts?
Marc: A loan from the World Bank was approved just a few months ago. It has been in discussion for the past two years, and the main rationale behind it is to replace a stalled plan to support Lebanon in importing gas from Egypt and electricity from Jordan via Syria.
This is a $250 million loan—not a grant—to help with several projects and structural administrative issues. The projects include a 150-megawatt solar farm in the Beqaa Valley, the reconstruction of the EDL national control center in the building that was damaged by the port explosion, and the rehabilitation of some hydropower plants. On the administrative side, the loan will support EDL, first through financial recovery or cash flow management in terms of priority of payments, and dealing with independent power producers, resources, consultancies, and operation and maintenance for power plants. The loan will also support the automation of billing and collection to reduce what are called “nontechnical losses”—consumers not paying their bills.
Further, the loan will support the establishment of a renewable energy department within EDL (as stipulated by Renewable Energy Law 318 of 2023) to manage all the renewable energy projects. EDL is already starting to launch some positions and to employ some people so that they can kick-start these projects. All of this could put the utility and the sector as a whole on the path to recovery.
Equitable Access Still Out of Reach
Zack: With these processes underway, what are the prospects for universal, equitable access to electricity in Lebanon?
Marc: Unfortunately, the situation is so dire that you cannot hope to achieve equitable access overnight, but you can work toward these goals. But it’s very difficult to even talk about these things, given the current collapse, the crisis, dollarization, the electricity supply, and the other problems that Lebanon is facing.
The path is long and bumpy. The country is so fragile in terms of government stability—elections next year could replace this government and derail everything we’ve talked about so far. There’s little continuity because of politicized decision-making and interference in such contexts.
But the quick answer to your question is that Lebanon first needs to depoliticize the energy sector, such that major decisions are made by experts with long-term visions rather than ministers or political appointees who will eventually leave office.
Second, Lebanon needs to rethink the design of the power system to account for the realities of the post-crisis era—especially the solar boom—which have meant a reduction in demand as people have become more energy-efficient and independent. Electricity also has to be made more affordable by reducing the cost of generation so that you can lower the rate for consumers.
And third is to support the transition to renewable energy so that you can reach your climate goals while reducing local environmental impacts and improving energy accessibility and affordability.
You are always in a crisis in this country, and there will never be a time when you are in a good position to plan, but following these guidelines while continuing to manage the crisis will help.
Depoliticization Is a Political Choice
Zack: Given that the relevant actors—politicians and parties, businesspeople connected to the political class, international donors, the World Bank—all have their own competing interests, how can the sector be depoliticized?
Marc: Everyone has their interests, but decision-makers can keep the politics out of the sector by not appointing political appointees, not listening to the input of political parties, and trying to at least insulate the technical discussion from political interference.
But you cannot really eliminate politics—if you privatize the grid or anything else, even that is a political decision. Everything is political, but ultimately you have to aim for affordable and equitable access to electricity without being distracted by political calculations. I know this might be a dream for a country like Lebanon, but maybe the only positive thing about the crisis is that people are now understanding the damage done by narrow partisan politics when they see the state of their roads, telecommunications, and electricity. They have come to understand how important it is to make unbiased, nonpolitical decisions in such contexts. Depoliticizing energy is a political choice that decision-makers have to make.
This Q&A is part of “Networks of Power,” a project led by Century International fellow Zachary Cuyler, which aims to map Lebanon’s evolving energy sector and assess the prospects for energy justice
Header Image Caption: A single apartment in Burj Hammud neighborhood is lit up during a power outage on August 2, 2021 in Beirut. Source: Roudy Doumit/Getty Images
Tags: lebanon, renewable energy, energy crisis