KSA Solar PV Market Outlook to 2030

KSA Solar PV Market Overview

• The KSA Solar PV market is valued at USD 3.5 billion, based on a five-year historical analysis, primarily driven by the Kingdoms goal to diversify its energy sources under the Saudi Vision 2030. The markets growth is further accelerated by increasing investments in large-scale solar projects and government support through the National Renewable Energy Program. The significant availability of solar radiation in Saudi Arabia, coupled with falling solar technology costs, has driven the adoption of solar photovoltaic systems across residential, commercial, and utility-scale sectors.
• The market is dominated by cities like Riyadh, Jeddah, and Dammam, with Riyadh being the focal point of government policies and renewable energy projects. These cities are leading the market due to their population density, increased energy consumption, and the presence of industrial sectors with high electricity demand. Additionally, the government's initiatives to integrate solar energy into urban developments and large-scale projects have further solidified the dominance of these cities.
• As of 2023, Saudi Arabia has awarded contracts for over 4 GW of solar PV projects under its National Renewable Energy Program (NREP). These projects include utility-scale plants like the Sudair Solar Plant, which will generate enough electricity to power 185,000 homes. The government's renewable energy strategy includes facilitating financing through public-private partnerships (PPP) and reducing bureaucratic delays, which has significantly sped up project timelines.

KSA Solar PV Market Segmentation

• By Technology Type: The market is segmented by technology type into Monocrystalline, Polycrystalline, Thin-Film, and PERC technologies. Recently, Monocrystalline technology has captured the dominant market share in KSA due to its higher efficiency levels and better performance in extreme temperatures, which is critical in Saudi Arabias hot and sunny environment. This technology is widely used in both residential and commercial projects because of its durability and superior energy yield, making it a favored choice in large-scale installations.
• By System Type: The market is also segmented by system type into Residential, Commercial, and Utility-Scale systems. Utility-scale systems are currently dominating the market, driven by large government-led projects such as the Sakaka PV IPP and other utility-scale initiatives aimed at reducing the countrys reliance on fossil fuels. These large-scale solar farms contribute a significant portion of the renewable energy target set by the government, creating demand for utility-scale solar installations.

KSA Solar PV Market Competitive Landscape

The KSA Solar PV market is dominated by a few key players, including ACWA Power, First Solar, JinkoSolar, Canadian Solar, and Tesla. These players are involved in various large-scale projects, benefiting from government contracts, technological expertise, and established global supply chains. This consolidation reflects the influence of major companies in shaping the solar market in Saudi Arabia.

KSA Solar PV Market Industry Analysis

Growth Drivers

• Sunlight Availability: Saudi Arabia enjoys high levels of solar irradiation, with an average of 2,200 kWh/m annually. According to the World Bank, the country has one of the highest solar potential zones globally due to its vast desert landscape and consistent sunlight throughout the year. The solar radiation received in KSA is approximately 5.8 kWh/m/day, making it a highly viable region for solar PV installations. This availability ensures year-round energy production, positioning solar PV as a key driver in the countrys renewable energy plans.
• Energy Diversification: Saudi Arabia is pursuing energy diversification to reduce its dependence on oil, with a goal of generating 50% of its energy from renewable sources by 2030 under Saudi Vision 2030. The countrys electricity demand is expected to increase by over 50 TWh annually by 2025, which makes solar PV a strategic resource in meeting this demand. The implementation of the National Renewable Energy Program (NREP) has already resulted in tenders for solar projects exceeding 3,670 MW, helping accelerate this transition.
• National Renewable Energy Program: Saudi Arabias National Renewable Energy Program (NREP) aims to develop over 58.7 GW of renewable energy capacity by 2030, with solar PV accounting for approximately 40 GW of that total. By the end of 2023, the government awarded contracts for nearly 4 GW of solar projects, with several more in the pipeline. These developments are set to reduce the country's reliance on conventional power sources and foster significant growth in the solar PV sector.

Market Challenges

• High Installation Costs: Although the cost of solar PV panels has decreased globally, installation costs in KSA remain a significant challenge due to the harsh desert conditions, which necessitate robust infrastructure and increased labor. For instance, specialized equipment for cleaning and maintaining panels in sandy environments can add 10-20% to the installation costs compared to more temperate climates. Additionally, high upfront capital requirements, particularly for utility-scale projects, act as a barrier to wider adoption of solar PV technology.
• Maintenance Challenges: Maintaining solar panels in the KSA environment is a challenge due to frequent sandstorms, extreme heat, and dust accumulation, which can reduce panel efficiency by up to 30%. The cleaning process must be conducted regularly and carefully, increasing operational costs. As per the Saudi Electricity Company, a 1 MW solar farm in Riyadh requires almost 50,000 liters of water annually for cleaning, presenting logistical challenges in arid regions. This high maintenance need adds to the overall cost burden for solar PV installations.

KSA Solar PV market Future Outlook

Over the next five years, the KSA Solar PV market is expected to see substantial growth, propelled by the Kingdoms renewable energy targets and continuous support for large-scale solar projects. Saudi Arabias commitment to achieving net-zero emissions, along with advancements in solar technology, will further boost investments in solar PV installations. Additionally, rising energy demand from industrial sectors and the push toward diversifying energy sources will serve as key growth drivers.

Market Opportunities

• Technological Advancements: The deployment of bifacial solar panels and artificial intelligence-based monitoring systems in Saudi Arabia is expected to increase the efficiency of solar PV farms by 10-20%. For example, the 1.5 GW Sudair Solar PV project, which uses bifacial modules, is expected to generate around 2.9 TWh annually. Technological advancements like these are crucial in optimizing energy yield in desert climates and can lower the cost per kWh, making solar PV a more attractive investment.
• Expansion of Off-Grid Applications: Off-grid solar PV applications, particularly in remote and rural areas, present significant growth opportunities in KSA. In regions without access to the national grid, solar PV can provide a reliable energy source. As of 2023, over 100,000 people in remote areas of Saudi Arabia have benefited from off-grid solar systems. The deployment of these systems is supported by governmental subsidies and programs aimed at expanding energy access in isolated regions.