In 2017, when Albania first adopted the legal framework “On Renewable Energy Sources,” few could have imagined the transformation that would follow almost a decade later.
Solar energy has become a magnet for capital, attracting not only traditionally energy-oriented enterprises but also businesses from other industries that are diversifying their investment portfolios.
The start for renewables, and especially for solar energy, was slow and complex. Bureaucratic procedures, a lack of institutional experience, and a reforming energy market kept the sector at a limited pace. The real acceleration came from two key developments.
First, the liberalization of the energy market created space for self-producers — a growing segment that is eligible to install capacities of up to 500 kWp. Second, and with the most profound effect, was the global energy crisis that began in October 2021.
The combination of rising raw material costs in the post-pandemic period, accelerated energy demand due to the economic recovery, and the war in Ukraine, which led to the interruption of Russian gas supplies, brought an unprecedented shock to energy markets.
In 2022, prices reached record levels. Albania was no exception: the country spent nearly half a billion euros to meet import needs, while on the Hungarian stock exchange, a reference point for the region, the record energy price reached 1,037 euros per MWh.
Although prices subsequently entered a downward trajectory, volatility remained high and continues to be present today, although not at the same extreme levels. It is precisely this climate of uncertainty that became the main driver of new energy projects. Private investments in the sector are estimated at around Euro 1.5 billion, including solar, wind, and hydropower projects.
Authorities report that over 2 billion euros of investments have been committed in the Albanian energy sector in recent years.
Currently, over 700 MW of new private photovoltaic capacities are operating, while around 400 MW of additional capacities belong to self-producers.
The developing portfolio is expected to bring the total capacities to around 1,500 MW with photovoltaic and wind technologies, while over 1,600 MW of storage capacities are in the study phase and in financial facilitation processes,” government representatives would underline in January.
Despite the large number of projects in various stages of the administrative process, only a part of them have managed to obtain production licenses. The Energy Regulatory Authority has granted 71 licenses for energy production from photovoltaic plants to date, with a total installed capacity of around 980 MW.
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