Saudi Arabia Solar Energy Market Research Report: Forecast (2025-2030)

Market Definition

Solar energy is the radiation from the sun capable of generating heat, causing chemical reactions, or generating electricity. The overall quantity of sun strength received on the planet is vastly greater than the world's present-day and anticipated power requirements.

Market Insights & Analysis: Saudi Arabia Solar Energy Market (2025-30):

The Saudi Arabia Solar Energy Market size was valued at around USD 6 billion in 2024 and is projected to reach USD 49 billion by 2030. Along with this, the market is estimated to grow at a CAGR of around 42% during the forecast period, i.e., 2025-30. With the need to reduce CO2 emissions, growing awareness of energy security, and retaining environmental sustainability, the inclination in the direction of using solar energy in Saudi Arabia is increasing. Therefore, awareness of lowering the cost of solar energy and favorable government initiatives are continuously driving the demand for solar energy.

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Moreover, the capacity for solar energy in Saudi Arabia is immense, given its excessive horizontal sun irradiation, ranging between 2,000 and 2,500 kWh/m²/year, one of the highest globally. This ample solar resource positions Saudi Arabia as an excellent location for large-scale solar energy initiatives. The country's strategic move toward energy diversification, driven by the decline in global oil prices and the need for sustainable electricity sources, underscores the pivotal role solar energy will play in the country's future energy landscape.

To enhance the renewable energy capacity and to achieve the monetary benefits associated with this, is the primary aim National Renewable Energy Program of Vision 2030. To manufacture 3.45 GW of renewable energy in 2020 and 9.5 GW in 2023, the initiative demonstrates the government's determination to renewable energy, driving a huge upward push in solar energy demand. Large-scale solar adoption is shown through major projects including the 300 MW solar PV plant in Sakaka and the 2,400 MW wind power plants in Midyan and Dumat Al-Jandal, demonstrating the government's commitment. These actions encourage the utilization of solar energy and also open up possibilities for partnerships between the authorities and private sectors, attracting considerable investments and speeding up the expansion of the solar energy market in Saudi Arabia.

In August 2018, the Electricity and Cogeneration Authority introduced internet-metering rules, a critical step in encouraging private investment in renewable electricity. These policies allow electricity users to install small solar power structures (<2 MW) and contribute more power to the nationwide grid to balance their utilization. This policy presents an appealing monetary benefit to encourage consumers to spend money on solar power, promoting the growth of small-scale solar projects. The solar energy market in Saudi Arabia is anticipated to experience enormous growth and sustainability due to improved involvement from residential and commercial sectors, leading to a surge in demand for solar energy solutions.

Moreover, the performance and value of solar panels in Saudi Arabia were considerably strengthened by using technological improvements, making solar energy an appealing alternative. Improvements in solar cell technology, energy storage, and production approaches have brought down costs, while local studies have addressed issues like high temperatures through strategies such as; electrodynamic monitors and sophisticated coatings.

Saudi Arabia Solar Energy Market Driver:

Increased Electricity Tariffs Driving Demand for Solar Energy – The increase in electricity tariffs as of 2024, has significantly boosted the attractiveness of solar energy investments in Saudi Arabia. With the increase in electricity tariffs for residential customers, solar PV structures presenting shorter payback intervals of 5-7 years are becoming a popular choice. This monetary encouragement is leading to a notable transition to solar power, reducing dependence on conventional energy sources and advocating for environmentally friendly behaviors. The government of Saudi Arabia is projected to spend around USD 300 billion by 2030 on renewable energy projects. Therefore, it is anticipated that the solar energy market will experience a sturdy increase due to a combination of higher tariffs, government support, and ongoing technological advancements in solar cell performance and power storage. As a result, purchasers and organizations are displaying interest in solar solutions, and the market is anticipated to develop notably due to effective monetary and regulatory elements.

Saudi Arabia Solar Energy Market Opportunity:

Supportive Government Initiatives to Provide Ample Growth Opportunities – As the country lies in the Arabian Peninsula, an ample amount of sunlight is present in the country that can be utilized for environmentally friendly purposes and diversifying energy sources for the nation. Therefore, the authorities of the country are continuously making efforts and launching initiatives and projects to boost its solar capacity. Also, the country's primary aim is to utilize renewable electricity resources to satisfy approximately half of the electricity demand by way of 2030. Thus, continuous investments are made in this direction. A 2 gigawatt (GW) Al Sadawi initiative for the Eastern province and building a 1 GW Al Masa’a plant in Hail province are the two main projects that were launched in February 2024 under the National Renewable Energy Program to support solar energy in the country. The high potential in the country to produce solar electricity is leading to a consistent launch of solar projects in the nation, and the number of these projects is expected to continuously rise in the upcoming years, thus providing enormous growth opportunities to support solar energy.

Saudi Arabia Solar Energy Market Challenge:

Competition from Oil Sources Restraining Market Growth – A significant challenge for Saudi Arabia’s solar energy industry is the competition from the country’s dominant oil sector. Saudi Arabia has long depended on oil for economic balance, contributing around 42% to its GDP and 87% to its export sales. This deep dependence creates inertia, as oil remains the number one source of both revenue and strength within the state. While Vision 2030 targets to lessen reliance on oil and shift towards renewable energy, including solar, the oil industry still holds enormous political and monetary impact. The transition to solar energy may face resistance from powerful stakeholders, such as Saudi Aramco, which benefits from ongoing oil production and export. The slow pace of renewable energy adoption is further complicated by subsidies for oil and gas, making fossil fuels economically attractive. Despite ambitious solar objectives, these vested interests in the oil industry may hinder the faster growth of the solar market, delaying Saudi Arabia’s shift to a more diversified energy landscape.

Saudi Arabia Solar Energy Market (2025-30): Segmentation Analysis

The Saudi Arabia Solar Energy Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for 2025–2030 at the national level. Based on the analysis, the market has been further classified as:

Based on Type:

• Solar Photovoltaic (PV)
• Concentrated Solar Power (CSP)

Solar photovoltaic accounts for over 65% market share in the Saudi Arabia Solar Energy Market among both solar energy types. The large share is attributed to the benefit of the cost-effectiveness of the PV sources. Along with it, another benefit of the PV system is that they are least affected by cloud presence over the Concentrated Solar Power (CSP) systems. As CSP requires direct sunlight without the presence of clouds, the PV systems can be deployed at varied locations where sunlight is not so direct. Over 3% of the electricity generation capacity of Saudi Arabia is held by Solar PV. In 2023, around 1% of the power generated in the country was from solar PV. Therefore, all these benefits are leading to a large market share of PV systems.

Based on Application:

• Residential
• Commercial
• Industrial

In recent years, there has been a huge growth in the residential segment of the Saudi Arabian Solar Energy Market. This industry represents more than 35% of the market. Notwithstanding its small market share, the industry's boom is driven by the growing quantity of solar energy plants being adopted, which is the primary component promoting its development. The reduced set-up prices and reduced monthly electricity payments are a few of the subsidies furnished by the national government that have resulted in the growth of residential sectors. Tasks like rooftop solar electricity plants assist the government in reaching their renewable power goals efficiently and ahead of schedule. Both the government and private energy corporations are promoting the setup of small rooftop solar electricity structures to maximize the usage of solar power to meet the country's energy needs.

Saudi Arabia Solar Energy Industry Recent Development:

• November 2024: Engie SA will develop a solar power project of 22 MW for Al Jouf Cement Company. The two companies have signed a power purchase agreement for 25 years.

Gain a Competitive Edge with the Saudi Arabia Solar Energy Market Report

1. The Saudi Arabia Solar Energy Market by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. The Saudi Arabia Solar Energy Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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