Morocco's solar energy market is undergoing a significant transformation, shifting from a CSP-dominated model to a PV-centric one with a growing emphasis on green hydrogen. The Noor Ouarzazate CSP complex, while mature, is facing operational challenges and economic pressures from the more cost-effective CSP-to-PV+BESS pivot. This shift is driven by the success of the Noor Midelt II/III project, which secured the lowest utility-PV tariff in Moroccan history at MAD 0.3245/kWh.
Installed Capacity: As of end-2025, Morocco's installed solar capacity stands at 1,819 MW, comprising 1,285 MW of utility-scale PV and 534 MW of CSP. The gap between ANRE/ONEE and IRENA's PV statistics will close with the commissioning of Noor Atlas and Noor Midelt II/III.
Supply-Side Analysis:
- CSP: The Noor Ouarzazate complex, the world's largest CSP facility, is facing operational fatigue, with Noor Ouarzazate III undergoing a significant outage and repair. No new CSP capacity has been procured, indicating a deliberate shift away from this technology.
- Utility PV: The pipeline through 2031 includes the Noor Atlas program, the remaining Noor Midelt I hybrid ramp-up, and the newly awarded Noor Midelt II/III project. The capex composition for utility PV is approximately USD 700/kWp, with modules accounting for around 30% of the cost.
- Offre Maroc: The government's green-H2 framework has reserved land for six projects across five investors, representing USD 32.5 billion in announced investment. However, FID timing is dependent on EU off-taker certainty and market conditions, with only two projects expected to reach FID by 2027.
Demand-Side Analysis:
- Domestic Load: Moroccan electricity demand is projected to grow at 3.5-4% per annum, reaching about 51 TWh by 2031. The 2025 ONEE Equipment Plan aims to add 4.3 GW of dedicated green-H2 feedstock RE and 4.0 GW of grid-connected RE by end-2027.
- EU Export: The rejection of the Xlinks interconnector project by the UK government has shifted export focus towards existing interconnections with Spain and the development of green-H2/NH3 export infrastructure at Moroccan ports.
- Green Molecules: The EU's CBAM, RFNBO, and the Hydrogen Bank are creating demand for Moroccan green hydrogen and ammonia. Moroccan logistics advantages position its green-NH3 as competitive at the EU port gate by 2028.
Pricing and Cost Dynamics:
- Utility PV: Moroccan utility-PV LCOE is competitive, ranging between USD 28-32/MWh, with the ACWA Power Noor Midelt II/III bid setting a benchmark for future tenders.
- Green Hydrogen: The LCOH for Moroccan green hydrogen is projected to fall from USD 4.50-5.50/kg in 2026 to USD 2.50/kg by 2030, driven by technological advancements and scale economies.
- Wheeling and Bilateral PPA: Law 40-19 has enabled corporate off-takers to access the MV grid, with ANRE setting wheeling tariffs. Bilateral PPAs with industrial off-takers are becoming increasingly attractive due to competitive pricing.
Scenarios:
- Bear Case (25% probability): Only 2 Offre Maroc projects reach FID by 2030, with aggregate solar capacity reaching 5.5 GW.
- Base Case (50% probability): 4 Offre Maroc projects reach FID by 2030, with aggregate solar capacity reaching 8.2 GW.
- Bull Case (25% probability): 4 Offre Maroc projects reach FID by 2027, with the second Spain interconnection reaching FID in 2026, and aggregate solar capacity reaching 11.5 GW.
Technology and Innovation Trends:
- CSP: The CSP sector is transitioning to a managed decline, with focus shifting to operations and maintenance.
- Green Hydrogen: The green-hydrogen technology stack is consolidating, with Moroccan deployment focusing on alkaline electrolyzers and salt-cavern storage.
- Digitalisation and Desert Performance: AI-driven O&M and desert performance optimisation are becoming increasingly important to improve yield in high-irradiance sites.
Regulatory and Policy Context:
- Law 40-19: This law has opened the MV grid to private producers and formalised origin certificates for renewable electricity.
- Offre Maroc: The government framework has pre-selected five investors and six projects for green-H2/NH3 development.
- Law 82-21: This law creates a legal framework for self-consumption, with a national grid-hosting cap of 3,886 MW.
- UHV Transmission: The Boujdour-Tensift UHV transmission line is crucial for evacuating southern-province solar generation.
Competitive Landscape:
- Operators: ACWA Power and Nareva are the leading operators, followed by Engie, EDF Renewables, and others.
- DFI Support: Development finance institutions have committed approximately EUR 1.1 billion in concessional capital.
Risks and Weaknesses:
- Offre Maroc FID Slippage: The success of the green-hydrogen pipeline is dependent on EU off-taker demand and FDI support.
- Boujdour-Tensift UHV Delay: The delay in the UHV transmission line will impact the development of southern-province solar projects.
- Spain Interconnection Delay: The delay in the third Spain interconnection will affect export capacity.
- CSP Operational Fatigue: The aging of the CSP fleet could lead to increased operating costs.
- Water Stress: Droughts and water scarcity could impact CSP and electrolyzer operations.
Recommendations:
- IPP Developers and Investors: Bid into the Boujdour-Tensift UHV pre-qualification, participate in ONEE-led utility-PV tenders, and consider Offre Maroc consortium opportunities.
- Project-Finance Lenders and DFIs: Anticipate concentrated financing demand from Offre Maroc projects and price wheeling tariff revision risk into PPA structures.
- EU Off-Takers: Structure offtake commitment letters for green-NH3 from Moroccan supply and engage early in bunkering and salt-cavern infrastructure development.
