Saudi Arabia is making a bold push into the global renewable energy sector with a significant focus on solar energy as part of its Vision 2030 plan to diversify the economy and reduce oil dependency. The Kingdom aims to source 50% of its electricity from renewable energy by the end of the decade, positioning itself as a leader in the clean energy transition.
By 2030, Saudi Arabia plans to generate 58.7 gigawatts (GW) of renewable energy, with 40 GW coming from solar photovoltaics (PV), 16 GW from wind, and 2.7 GW from concentrated solar power. Central to this vision is the country’s solar manufacturing initiative, which could potentially reshape global energy dynamics.
Saudi Arabia has been actively ramping up its solar capacity through strategic partnerships. In July, the Kingdom’s Public Investment Fund (PIF) announced collaborations with Chinese giants JinkoSolar and TCL Zhonghuan, alongside wind turbine manufacturer Envision Energy. These alliances are expected to bring 30 GW of solar PV manufacturing capacity to Saudi Arabia, from the production of ingots to the final assembly of modules. This initiative supports the National Renewable Energy Program’s goal of localizing 75% of renewable energy components by 2030.
This effort not only aligns with Saudi Arabia’s ambitious sustainability targets but also capitalizes on shifting global trade dynamics. As China faces increasing trade barriers from Europe and the U.S., Saudi Arabia is emerging as a new hub for renewable energy manufacturing, catering to global demand.
Experts believe Saudi Arabia has unique advantages in solar energy. With vast deserts receiving year-round sunlight, the Kingdom boasts one of the world’s highest potentials for solar energy production. However, what makes Saudi Arabia truly stand out is its access to high-purity silica, a key material for producing solar PV panels.
“Saudi Arabia possesses some of the purest silica in the world, with a purity level of 99.7%. This gives the Kingdom a strong competitive edge, as solar PV panels are largely made from silica,” says Faisal Faeq, a leading energy advisor. The availability of this high-quality raw material, combined with the country’s well-developed supply chains, positions Saudi Arabia as a low-cost producer in the global solar PV market.
Additionally, the Kingdom’s vast experience in industrial-scale energy production can be leveraged to develop its solar manufacturing industry. With lower production costs than other major markets, Saudi Arabia is well-placed to become a competitive solar PV manufacturer, according to Yousef M. Alshammari, CEO of CMarkits.
Situated at the crossroads of Europe, Africa, and Asia, Saudi Arabia enjoys a logistical advantage, reducing shipping times and costs to key markets. As it develops its solar manufacturing sector, the Kingdom could offer a cost-effective alternative to traditional hubs like China and Germany, diversifying global supply chains and mitigating risks.
China currently dominates the global solar PV market, controlling over 80% of production across all stages. However, Saudi Arabia’s strategic location, along with its growing solar manufacturing base, could challenge these established players in the medium to long term. The Kingdom’s ability to provide a steady, low-cost supply of solar panels to neighboring countries and beyond could significantly alter the global market landscape.
Despite the optimism surrounding Saudi Arabia’s solar ambitions, the road ahead is not without challenges. Securing sufficient demand, particularly from international markets, remains crucial for the success of its solar manufacturing sector.
“Investors need to be confident in the market’s stability,” Alshammari notes. “While local demand exists, the focus will largely be on exporting solar panels. Establishing long-term contracts with international clients, particularly in Asia, Europe, and the U.S., will be critical for scaling up production.”
Furthermore, to attract private investors, the Kingdom will need to provide incentives and demonstrate the viability of its solar manufacturing sector. Building a robust market for solar panels, both locally and internationally, will be essential for sustaining growth in this industry.
Saudi Arabia’s solar manufacturing initiative could have far-reaching implications, not only for the country but for the global energy market. If successful, it would mark a significant shift in the Kingdom’s energy strategy, moving it from being a global oil giant to a leader in the renewable energy space. Additionally, it would provide an alternative supply source to traditional solar manufacturing powerhouses like China, potentially transforming the global solar industry.
The initiative represents a crucial step in Saudi Arabia’s broader Vision 2030 goal of economic diversification. By leveraging its natural resources, geographic advantages, and industrial experience, the Kingdom is positioning itself as a major player in the renewable energy revolution, signaling a new era in its economic and environmental future.
