Advancing Solar Energy in Albania: The Leadership Role of Private Sector Investments in Renewable Energy Diversification

Abstract

Albania’s energy sector remains predominantly dependent on hydropower, which accounts for the vast majority of the country’s electricity generation. While this reliance on renewable sources is commendable, it also exposes the system to growing risks related to seasonal variability and the broader effects of climate change. As national energy priorities shift toward diversification and resilience, solar energy emerges as a strategic alternative—leveraging Albania’s high solar irradiation, favorable geography, and rising investor interest.

This study explores the role of the private sector in advancing Albania’s solar energy transition, focusing on the enabling conditions, investment barriers, and opportunities for scalable deployment. Grounded in qualitative research conducted as part of the project “Potenciali i Energjisë Diellore në Shqipëri” (Solar Energy Potential in Albania) carried out by Luarasi University with the support of the Albanian Agency for Scientific Research and Innovation (AKKSHI), the paper draws on focus group discussions with businesses, consultants, and regulatory actors to identify key institutional and financial challenges. It also incorporates comparative insights from neighboring countries—North Macedonia, Greece, and Croatia—to assess relevant policy innovations and market mechanisms.

The findings highlight systemic bottlenecks, including fragmented permitting processes, limited access to renewable finance, and the absence of structured incentives. At the same time, the research reveals strong interest and willingness among local investors to lead Albania’s solar transformation, provided that regulatory clarity and institutional coordination improve. The paper concludes with actionable recommendations aimed at fostering public-private alignment, de-risking investment, and positioning solar energy as a central pillar of Albania’s energy future.

llar of Albania’s energy future.