Self-generation law: Restrictions prevent Moroccans from utilizing surplus solar energy

Moroccans seeking to generate electricity from solar power face legal constraints that limit the economic benefits of their investments. Law No. 82.21, concerning self-generated electricity, maintains a cap that does not exceed 20 percent of annual electricity production that can be sold to the grid operator. Meanwhile, according to a new analytical report, the current framework does not provide a clear tariff that ensures fair compensation for surplus energy.

This situation raises practical questions about the viability of individual investment in solar energy, particularly for households, farmers, and small enterprises that can produce part of their electricity needs and even generate additional quantities that could be fed into the grid. However, according to the report, they do not find sufficient legal and economic conditions to convert this surplus into a clear financial return.

A report titled “Fair Energy Transition in Morocco: Paths for Reforming Law 82.21 to Promote Decentralized Renewable Energy Production,” prepared by the “Solidarity and Cooperation Space in the Eastern Region” in partnership with “Greenpeace Middle East and North Africa,” highlighted what it considered imbalances in the legal text that entered into force in 2023. The report argues that the law regulates self-generated electricity more than it encourages its spread and expands the base of beneficiaries.

One of the main points of contention lies in Article 12 of the law, which limits the amount a self-producer can sell to the grid operator to 20 percent of their annual production. The report argues that this cap undermines the economic viability of projects, particularly when a facility’s production capacity exceeds its actual needs, as the owner does not receive compensation for the full amount of electricity that could be fed into the grid.

The issue extends beyond the permitted sales volume. The report points to the absence of a clear tariff for purchasing surplus electricity on low-voltage networks, leaving households and businesses in uncertainty about the financial returns from their investments. This ambiguity makes it difficult to calculate the payback period for solar equipment installation costs or to secure financing for such projects.

The report also criticizes the 11-kilowatt threshold used to distinguish between the declaration and approval systems, arguing that it fails to meet the needs of various projects, such as multi-unit residential buildings and farms requiring refrigeration room operations. Exceeding this capacity could subject projects to more complex regulatory procedures.

In another aspect, the report raised the issue of potential conflicts of interest in the procedures for connecting self-generators to the grid. This is particularly relevant when the distribution grid operator is responsible for reviewing connection applications, given that the expansion of self-generation could impact the volume of electricity it sells to consumers. In this context, the report called for the handling of such applications to be entrusted to an independent body or subjected to independent regulatory oversight.

These criticisms carry significant weight within the context of Morocco’s strategic focus on renewable energy. In 2024, renewable sources accounted for 45 percent of the country’s installed electrical capacity and contributed approximately 27 percent of total electricity generation. Morocco aims to raise this share to 52 percent by 2030.

The report’s authors argue that expanding this trend should not be limited to large-scale projects. Instead, it requires opening the door to decentralized generation, enabling households, businesses, and agricultural farms to contribute to electricity production, thereby alleviating pressure on the grid and reducing reliance on imported energy sources.

Among the reforms proposed by the report is a revision of the law’s fundamental objective to recognize consumers as potential electricity producers and suppliers. This includes abolishing the 20 percent cap, establishing a financial compensation for the full amount of energy supplied, adopting a transparent and fair tariff structure, raising the 11-kilowatt threshold, and simplifying licensing and grid connection procedures.

It also called for the completion of regulatory texts concerning distribution and storage networks, as well as the calculation of electricity produced, consumed, and supplied, alongside a review of the penalty system and the simplification of administrative procedures that may prevent a wide range of stakeholders from entering the self-generation market.

These recommendations reignite the debate over the adequacy of the current legal framework in meeting the objectives of the energy transition, particularly because expanding the production of clean electricity is not solely about building large-scale power plants, but also about enabling consumers to invest in self-generation and derive economic benefits from the surplus energy they produce.