In the lineup of governmental duties, ensuring a stable electricity supply is a basic expectation. However, in Lebanon, depending on the government for reliable power has become an unpredictable proposition. The country’s businesses have long been self-reliant, resorting to their generators to meet their electricity needs. Yet a notable transition unfolds as numerous Lebanese companies adopt renewable energy (RE) solutions.
Those Lebanese businesses, which in recent years embarked on to greater reliance on solar energy, have undergone a financial evolution, observing significant monetary and environmental savings in the course of their transition. Their moves toward sustainability are evident in noteworthy decreases in CO2 emissions and diesel consumption. This transformation has been facilitated through diverse channels, including active participation in funding projects and judicious securing of loans.
As many Lebanese companies seek to adopt RE, this analysis looks at three Lebanese companies operating in the manufacturing and agro-business sectors to understand their motivations for transitioning and assess how their businesses are benefiting from this shift in various ways, as well as the impact of their sustainable practices on their operations and the broader industry landscape.
Generator investments
to solar installation
Even before the 2019 crisis, state electricity failed to reach the industrial zone in Bchamoun, Mount Lebanon, where Beesline, a cosmetics manufacturer, is located. “We’ve always depended on generator suppliers for electricity,” says Mohamad Mouhaidly, technical and facility manager at Beesline. However, at the beginning of 2022, the company faced issues with the generator provider over increased prices and service interruptions. Subsequently, Beesline decided to buy its own generators to have more stability and autonomy. “Our two-shift production relies on continuous electricity; any interruption disrupts our workflow,” adds Mouhaidly.
Beesline’s sustainability department, driven by the company’s policy on environmental care, and animal testing-free products, initiated a reevaluation of continuous generator use and reliance on diesel. The discrepancy between the company’s vision and their means of production, in addition to the inconvenience and high costs of generator fuel, prompted them to consider transitioning to RE to reduce CO2 emissions.
The Country Entrepreneurship for Distributed Renewables Opportunities (Cedro 5), a program initiated by the UNDP in Lebanon and currently in its fifth phase of deployment, focuses primarily on promoting sustainable energy and resource efficiency. It aims to enhance the use of RE sources and improve energy efficiency across various sectors. For Beesline, participation in the Cedro 5 project provided the essential financing to enable its shift to RE in 2022.
Pre-crisis funding for RE
For Balkis Orchard, a fruit-growing and juice-producing agrobusiness in southern Lebanon, and Sanita, a manufacturer of paper products in the Byblos district and part of the INDEVCO group of companies, the move to RE took place earlier. In 2017, Balkis made a significant stride towards sustainability by installing a photovoltaic (PV) system of 600 solar panels. The initiative was funded by a loan from Banque Du Liban (BDL), the Lebanese central bank, which aimed to incentivize industrialists in Lebanon to embrace RE sources. With fuel costs on the rise, Balkis Company saw an opportunity to reduce its reliance on diesel-powered energy.
Balkis’ transition to RE served a dual purpose within its agricultural framework. A notable portion of their energy allocation is dedicated to irrigating extensive orchards to ensure the vitality of their produce, while the rest powers machinery and essential refrigeration units that are crucial for their industrial operations.
Ali Beydoun, the company’s commercial director, tells Executive that “Balkis utilizes an off-grid solar system that generates electricity directly from sunlight, primarily during daylight hours.” This system functions without batteries, harnessing solar power exclusively when the sun is shining. The solar system and the generators or the main power grid (EDL in this case) operate together, supplementing each other when needed. Consequently, when solar energy is not sufficient during periods of cloud cover or at night, the company relies on its generators for power. However, with the integration of the solar system, their dependence on the site’s larger generator has significantly decreased in the last six years.
“There’s always juice in the making, and it needs to be stored between zero to four degrees Celsius, requiring continuous energy. Even the raw materials and the cartons used for packaging the juice must be stored in a controlled climate, in a cool place with substantial air conditioning,” explains Beydoun regarding the continued need for generators.
For both Beesline and Balkis, generators moved from a primary energy source to a backup. Mouhaidly tells Executive that even if Beesline is utilizing solar energy, it cannot fully phase out its generators since they remain essential during cloudy days and when operating night shifts. However, he maintains that a full transition to renewable energy is “a dream we wish to see fulfilled.”
Sanita’s pivot to RE also occurred in 2017, but in this case the financial loan was provided by Bank of Europe. Employing surplus space at its seaside manufacturing site, Sanita implemented a PV system that Wissam Abi Diwan, Sanita’s general manager, describes as “the largest privately owned renewable energy system in Lebanon.”
A question of efficiency
When asked about the system’s efficiency, Abi Diwan explains that “during our busy workdays, when all our machines are running, solar energy covers about 25 percent of our energy requirements.” He adds that “on less demanding days when not all machines are operational, solar power steps up and fulfills 50 percent of our needs.” Emphasizing the versatility of solar energy, he explains that “during periods when our machines are completely idle, Sanita channels the unused solar energy from its system to support a sister company’s electrical needs. It’s a smart way to ensure that the surplus energy doesn’t go to waste and benefits another part of [the group’s] operations.”
In addition to increased energy efficiency, Sanita has achieved notable savings in electricity consumption over the last six years since adopting RE. At the time of this writing, the company is saving 3,500 kWh daily. Through managing to secure a rate of $0.36 per kWh, Sanita has had daily savings of $1,260 since 2017 compared to their previous expenses on conventional energy sources.
For Balkis, solar energy covers 30 to 35 percent of its needs, producing up to 300 MWh annually and saving 1,800 tonnes of CO2. As for the maintenance of their solar panels, they monitor their renewable energy system online. When the system’s output decreases or isn’t consistent, they investigate potential causes, primarily checking for any dust accumulation on the panels. “This occurrence isn’t frequent; it has happened two to three times since we switched to solar in 2017,” says Beydoun.
Marianne Itani, the sustainability manager at Beesline, tells Executive, “our company made it to 55 percent green energy with 15 percent for water heating and 40 percent for electricity.”
Itani adds that they aim to reach 75 percent green energy by late 2024 or early 2025 by expanding their solar initiatives with another round of support from UNDP as they plan to participate in the Cedro 6 project.
Beesline began their renewable energy transition with solar water heating, which is crucial for their cooking, cleaning, and product-making processes. “We initially aimed to also start our solar PV project in 2022,” Mouhaidly explains. Yet due to some technical issues, they commenced at the beginning of 2023. Mouhaidly highlights that this delay was necessary for them to implement system updates to ensure maximum efficiency.
Amortization of investments
“Switching to renewable energy has been the best decision for us and the environment. It’s a win-win situation,” says Itani. Considering that their annual savings range from $60,000 to $70,000, the company foresees recouping its investment in the renewable energy project within a three-year time frame.
In the realm of energy management and environmental impact, the data given by Beesline reveals notable improvements in both energy efficiency and carbon emissions. From January to June, energy consumption per tonne of production decreased from 531 kilowatt hours (kWh) in 2022 to 369 kWh in 2023, indicating enhanced operational efficiency. Concurrently, carbon emissions per tonne of production saw a reduction from around 230 kg in 2022 to 160 kg in 2023. Despite a slight increase in total carbon emissions (92,400 kg in 2022 to 93,015 kg in 2023), the context is significant: this emission level is equivalent to the energy use of approximately 12 households for an entire year. These metrics collectively signify progress in resource optimization and environmental sustainability within the assessed timeframe.
According to data from Apave Group, a risk management firm in Beirut, Beesline saw zero percent green energy savings from January to June 2022. However, in August 2022, there was a notable transformation as the company adopted a more sustainable approach, with nearly 91 percent from fuel energy and nine percent from solar water. This positive momentum persisted, as by January 2023 there was only 49 percent reliance on fuel energy and substantial contributions from solar PV and solar water. The average green energy percentage for the first half of 2023 stands at 58 percent, surpassing the targeted 55 percent.
Corporate environmental awareness and the limits of solar power
Beesline’s Itani says that environmental consciousness extends beyond RE, asserting that “by next year, eco-friendly packaging will adorn the shelves of stores across Lebanon.” Itani tells Executive that they also plan to introduce refillable bottles, adding that strong marketing is needed as currently, “Lebanese people are not used to that.“
In regard to other environmental considerations for Balkis, Beydoun says, “The downside of our renewable energy project was that we had to cut a few trees to make space for the panels. However, we’ve positioned the panels on elevated bases, allowing for potential planting in the future, though not trees.” He emphasizes that the company’s environmental consideration doesn’t stop at RE. “The one-liter cartons we use for our juices originate from a sustainable forest in the US. For each tree harvested, many more are planted in its place.”
Most companies in Lebanon that have started the transition to RE, like the ones discussed in this analysis, still find themselves unable to phase out generators completely. Even so, Itani suggests that companies relying solely on generators need to reconsider. “Seek support, make the switch, save money, and help the planet,” she says. Abi Diwan echoes this sentiment. “Solar energy, especially for the business community, can be the solution to Lebanon’s electrical crisis, since many businesses in Lebanon operate during the daytime. They can actively participate in funding projects, or they can jumpstart their utilization by obtaining a loan, which they can return using the financial savings achieved from the project.” However, Beydoun, while acknowledging the increasingly critical need for an RE overhaul in businesses, maintains that while RE is essential, “it’s not a complete solution; even other countries don’t rely entirely on it.” He further comments, “Considering the status of state electricity in Lebanon, a solution seems distant. Companies might contemplate transitioning to renewable energy, yet the decision depends on their business type.”
Lebanese businesses are flipping the switch in unique ways when it comes to renewable energy, eschewing a one-size-fits-all scenario by adopting renewable energy through varied approaches based on their distinct needs, financial capabilities, and the support available to them. Whether through loans or self-funding initiatives, these businesses navigate varied paths to transition. Their utilization of RE ranges from systems dependent on batteries to those exclusively relying on direct sources. Yet, the underlying catalyst for this pivotal shift lies in Lebanon’s historical electricity crisis, a chronic issue predating the recent turmoil. Pervasive reliance on generators is giving way to a greater shift towards renewables, with companies reporting substantial financial and environmental gains, marking a turning point in sustainability and stability within an energy-stricken context.
Lebanese communications talent Carol Farah teamed up with Executive for an internship in business journalism after her successful completion of studies at the Lebanese University
