Regional solar and wind capacity grew sharply last year, but mainly outside the Gulf. The UAE and Saudi Arabia have ambitious plans that may shift the balance.

Installed capacity for electricity generation from renewable sources in the Mena region increased by 3.8% in 2016 to 25.2GW, according to the Abu Dhabi-based International Renewable Energy Agency (Irena). This compares with a 7.3% hike to 2.11TW for the world as a whole.

While Mena renewables capacity continues to be dominated by...