(Image credit: Arab News)
The solar industry in Saudi Arabia is on a consistent rise. The solar market has now reached pre-pandemic levels after covid affected the market. Saudi Arabia is now expected to reach 1028MW of capacity by the end of the 2024, registering a compound annual growth rate of 51% in the forecast period. A combination of supportive government policies, decreased fossil fuel dependency, and a conscious effort to distribute solar are expected to drive the market’s growth. The countries’ National Renewable Energy Programme has set a 40GW solar energy installed capacity target by 2030. At its current rate, Saudi Arabia are set to achieve this target.
What are Saudi Arabia’s solar market trends?
Solar PVs are expected to dominate the solar market in Saudi Arabia. The technologies constant decline in cost and versatility makes it the perfect choice for Saudi Arabia’s sun-rich environment. In 2021, the government in Saudi Arabia launched a green initiative to reinforce the countries commitment to have 50% of its total energy generation be from renewable energy. The nation’s ‘Vision 2030’ strategy has set the target of increasing the solar capacity to 40GW and installing 2.7GW of concentrated solar power by 2030. Saudi Arabia’s ‘Renewable Energy Project Development Office’, within the Ministry of Energy, is responsible for delivering the countries National Renewable Energy Program in line with ‘Vision 2030’. In 2012, Saudi Arabia’s total solar installed capacity stood at 14MW and by 2021 this reached 439MW. Solar PVs currently equal 88% of total solar energy capacity in Saudi Arabia.
What solar policies are in place in Saudi Arabia?
In order to reach the nation’s ‘Vision 2030’ strategy the government have directed the Public Investment Fund (PIF) to provide financial support for the renewable strategy. The PIF is currently mandated to invest $40bn annually to reach the ‘Vision 2030’ targets. These include:
- The 40GW and 2.7GW of installed solar capacity mentioned.
- Reach carbon neutrality by 2030.
- Establish net zero carbon emissions by 2050.
- What projects have been launched in Saudi Arabia?
In September 2022, the Saudi Arabia Procurement Corporation launched 5 projects to generate electricity as a part of the National Renewable Energy Programme. 3 are wind projects, the other 2 are solar. Both solar projects are located in Al Hinakiyahand Tabarjalwould with one solar project having a 11MW capacity, the other has a 400MW capacity. In March 2022, Saudi Arabia awarded 1GW of total capacity to solar power projects. Saudi Power Procurement Company signed a 25year PPA for a 700MW plant with Al Ross Solar Energy Company. The company signed an agreement for 300MW solar plant, the contract was awarded to Jinko Solar and set to be built in Riyadh and will cost $213m. ACWA Power have signed an agreement with Badeel, the water and electricity company in Saudi Arabia, to build the world’s largest single-site solar plant in Al Shuaibah, Mecca Province. The facility is expected to be operational by the end of 2025 with a generating capacity of 2060MW. The project is both developed and operated as a 50/50 joint venture between ACWA and Badeel. Each project is backed by the Saudi Arabia Sovereign Wealth fund and the PIF who hold a 100% stake in ACWA and Badeel.
Saudi Arabia’s Energy Industry Overview
Saudi Arabia’s solar industry has a moderately fragmented market that is highly competitive with no dominant players. Significant companies operating in the region are:
- Alfanar Group
- Abu Dhabi Future Energy Company
- EDF Renewables
- Saudi Electricity company
- ACWA Power company
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