The Saudi Arabia solar photovoltaic (PV) market size reached an impressive size of approximately 1.90 GW in 2024. With the nation intensifying its focus on renewable energy, the market is projected to grow at a CAGR of 11.5% during the forecast period of 2025 to 2034, reaching a volume of 5.26 GW by 2034. This growth aligns with Saudi Arabia’s commitment to diversifying its energy mix under Vision 2030, reducing its dependence on fossil fuels, and addressing climate change.
In this blog, we explore the market dynamics, key drivers, challenges, emerging trends, and segments shaping the future of the solar PV industry in Saudi Arabia.
Key Drivers of Market Growth
1. Vision 2030 and Renewable Energy Initiatives
Saudi Arabia’s Vision 2030 sets ambitious targets to diversify the economy and reduce reliance on oil. The renewable energy sector, particularly solar PV, plays a pivotal role in achieving these goals. The National Renewable Energy Program (NREP) aims to develop over 58.7 GW of renewable energy capacity by 2030, with solar PV accounting for a significant share.
2. Abundant Solar Resources
Saudi Arabia benefits from one of the highest solar irradiation levels globally, making it an ideal location for solar PV installations. The vast desert areas provide ample space for large-scale solar farms, contributing to the market's growth.
3. Government Support and Policies
Favourable government policies, including subsidies, tax incentives, and feed-in tariffs, encourage investments in solar PV projects. The involvement of the Saudi Electricity Company (SEC) and the Renewable Energy Project Development Office (REPDO) further supports the sector.
4. Declining Costs of Solar PV Systems
Technological advancements and economies of scale have significantly reduced the cost of solar PV systems, making them more accessible to residential, commercial, and industrial consumers.
5. Increasing Energy Demand
With rapid urbanisation and industrialisation, Saudi Arabia’s energy demand continues to rise. Solar PV provides a sustainable solution to meet this growing demand, particularly during peak hours.
Challenges in the Saudi Arabia Solar PV Market
1. Harsh Climatic Conditions
Saudi Arabia’s extreme heat, sandstorms, and dust accumulation can reduce the efficiency of solar panels, necessitating frequent maintenance.
2. High Initial Investment
Although the cost of solar PV systems has declined, the initial investment for large-scale projects remains significant, potentially deterring some investors.
3. Dependence on Government Support
The market relies heavily on government incentives and policies. Any changes in political priorities or economic conditions could impact growth.
4. Grid Integration Issues
Integrating solar PV into the existing energy grid poses technical challenges, including energy storage and grid stability during periods of low sunlight.
Emerging Trends in the Saudi Arabia Solar PV Market
1. Growth of Utility-Scale Solar Projects
Large-scale solar farms, such as the Sakaka PV IPP project, highlight the increasing adoption of utility-scale solar installations. These projects are critical to achieving the country’s renewable energy targets.
2. Adoption of Advanced Technologies
Innovations like bifacial solar panels, thin-film technology, and AI-driven maintenance solutions are enhancing the efficiency and reliability of solar PV systems in harsh climates.
3. Integration of Energy Storage Solutions
The adoption of battery storage systems is growing, enabling better grid stability and energy availability during non-sunny periods.
4. Private Sector Participation
Increased private sector involvement through public-private partnerships (PPPs) and foreign investments is accelerating the development of solar PV infrastructure.
5. Focus on Distributed Solar Energy
The residential and commercial sectors are increasingly adopting rooftop solar panels, driven by declining costs and growing awareness of clean energy.
Market Segmentation
The Saudi Arabia solar PV market can be segmented by application, type, and end user.
1. By Application
- Utility-Scale Projects: Dominates the market due to large-scale solar farms designed to supply power to the grid.
- Commercial and Industrial: Businesses are adopting solar PV to reduce energy costs and meet sustainability goals.
- Residential: Rising interest in rooftop solar installations for energy independence and cost savings.
2. By Type
- Crystalline Silicon: The most commonly used technology due to its high efficiency and durability.
- Thin Film: Gaining traction for its flexibility and performance in high-temperature environments.
- Others: Includes emerging technologies like perovskite solar cells.
3. By End User
- Energy Utilities: Play a key role in large-scale solar projects.
- Commercial Entities: Increasing adoption to lower operational costs and carbon footprints.
- Residential Users: Growing segment driven by affordability and government incentives.
Future Opportunities in the Saudi Arabia Solar PV Market
1. Development of Floating Solar Farms
Floating solar PV systems on reservoirs and water bodies could provide an innovative solution to land-use constraints and enhance efficiency by cooling the panels.
2. Expansion of Smart Grids
Integrating solar PV with smart grid technologies can optimise energy distribution and management, supporting renewable energy integration.
3. Collaboration with International Players
Partnerships with global solar companies can bring advanced technologies and investment into the Saudi market.
4. Export Potential
As Saudi Arabia ramps up its solar PV manufacturing capabilities, it could position itself as a regional hub for exporting solar technology.
5. Focus on Sustainability Goals
The emphasis on reducing carbon emissions and promoting green energy will continue to drive investments in solar PV.
