Saudi Arabia is witnessing a significant shift towards solar energy as the government phases out energy subsidies. This transition is part of a broader strategy to achieve 50% renewable energy in its energy mix by 2030 and net-zero greenhouse gas emissions by 2060. The International Monetary Fund (IMF) reported that Saudi Arabia is gradually increasing fuel prices to eliminate energy subsidies by 2030.
The move towards solar energy is driven by the immediate economic benefits of reducing energy costs. For instance, Fakeeh Care Group has installed solar panels on a hospital parking structure in Jeddah, anticipating a reduction in electricity expenses by over 170,000 riyals in 2024. Similarly, Tamer Group, a Saudi healthcare and consumer goods company, expects to save over 440,000 riyals in energy costs by deploying solar panels at its logistics centers in Jeddah and Riyadh.
International companies like IKEA and GlaxoSmithKline (GSK) are also adopting solar projects in their Saudi subsidiaries. The demand for Chinese photovoltaic products is rising as Saudi Arabia accelerates its energy transition.
Despite the benefits of decreasing solar costs, experts emphasize that the primary driver for this shift is the government-led fiscal and energy subsidy reforms.
