ISLAMABAD: In a remarkable pivot from its deep-rooted oil legacy, Saudi Arabia is positioning itself as a rising force in the global solar energy landscape.
Once synonymous with fossil fuels, the Kingdom is now carpeting its vast deserts with solar panels, signalling a bold and strategic shift towards renewable energy.
According to The Wall Street Journal, this transformation is being driven not just by environmental concerns, but by strong economic logic. Solar energy — once expensive and unreliable — has become one of the cheapest and fastest-to-deploy energy sources, making it an attractive alternative for meeting the Kingdom’s surging electricity demand.
At the heart of Saudi Arabia’s clean energy strategy is the ambitious goal: to generate 50pc of its electricity from renewable sources by 2030. To achieve this, government has launched a massive build-out of solar infrastructure.
Flagship companies like ACWA Power, backed by Public Investment Fund (PIF), are playing a leading role. Among their major initiatives is the 1.5GW Sudair Solar Project, one of the largest in the region.
As of 2024, Saudi Arabia’s installed solar capacity has climbed to 4,340MW, up from 2,585MW in 2023, indicating a rapid upward trajectory. According to media reports, multiple utility-scale solar projects are either operational or under construction, with total capacity already reaching several gigawatts. Project tenders have been awarded to global players such as TotalEnergies and EDF. One of most significant investments, a $8.3 billion initiative by ACWA Power and Aramco Power, aims to install 15GW of solar and wind power across multiple regions.
The Kingdom’s broader target is to reach 130GW of total renewable energy capacity by 2030, combining solar and wind. This goal aligns with Saudi Arabia’s long-term ambition to diversify its economy under Vision 2030 agenda. A key factor enabling this shift is sharp decline in the cost of solar panels and battery storage, particularly from China. These falling costs have made solar power not only viable but economically irresistible. In recent auctions, Saudi Arabia has offered electricity at record-low prices — below 1.3 cents per kilowatt-hour — making solar cheaper than power generated from domestically burned oil. That’s significant, as Saudi Arabia still relies on oil for nearly one-third of its electricity generation, a practice that costs the Kingdom an estimated $20 billion annually in lost export revenue. By replacing oil-fired power generation with solar energy, government hopes to conserve crude for export, boost revenue and reduce carbon emissions in alignment with global climate goals. However, the road ahead is not without challenges. The desert climate presents harsh conditions, including extreme heat and dust accumulation, which can reduce solar panel efficiency.
Moreover, integrating intermittent renewable energy into national grid demands major investment in storage, transmission and energy management technologies.
Still, the Saudi leadership remains undeterred. As part of country’s Vision 2030 economic diversification agenda, renewable energy is not viewed as a symbolic gesture, but as a cornerstone of a new energy economy. The government is not only funding large-scale projects, but also crafting supportive policies, enabling public-private partnerships and developing local manufacturing and workforce capacity. As The Wall Street Journal notes, this is not a fleeting experiment. Saudi Arabia is reengineering its energy ecosystem with solar at the centre. The Kingdom, long known as world’s oil capital, is now charting a future in which sunlight, not oil, powers its cities, industries and ambitions.
Whether it will fully succeed remains to be seen, but its transformation is already reshaping energy dynamics of Middle East.