Saudi Arabia Renewable Energy Market Size - Industry Report on Share, Growth Trends & Forecasts Analysis (2025 - 2030)

Saudi Arabia Renewable Energy Market Analysis

The Saudi Arabia Renewable Energy Market size is estimated at 10.27 gigawatt in 2025, and is expected to reach 29.27 gigawatt by 2030, at a CAGR of 23.3% during the forecast period (2025-2030).

Saudi Arabia's renewable energy landscape is undergoing a transformative shift, driven by the country's strategic Vision 2030 initiative to diversify its energy portfolio. The kingdom possesses exceptional renewable energy potential, particularly in solar energy, with an average solar irradiation of 250 W/m², significantly higher than the global average of 100-200 W/m² in high-potential solar areas. The country experiences an impressive average of 8.9 hours of daily sunshine and horizontal solar radiation of 5,600 Wh/m², making it ideally positioned for solar energy development. These natural advantages, combined with the government's commitment to sustainable energy, are reshaping the nation's energy infrastructure.

The industrial and residential sectors are driving significant changes in energy consumption patterns and renewable adoption. Currently, 10-15% of Saudi Arabia's electricity is utilized in desalination plants, while residential consumption accounts for 40-50% of total electricity use, with two-thirds dedicated to air conditioning. To address this high energy demand, the Saudi Industrial Development Fund launched the Mutjadeda program in 2022, which provides up to USD 130 million in financing for residential and commercial renewable energy projects, demonstrating the government's commitment to supporting clean energy adoption across sectors.

The wind energy sector is emerging as a crucial component of Saudi Arabia's renewable energy portfolio, with favorable geographical conditions supporting its development. The country experiences annual average onshore wind speeds between 6.0 and 8.0 m/s, with extensive areas recording speeds exceeding 7.0 m/s, particularly in the northeast, central regions, and western mountains. This potential has been demonstrated through projects like the Dumat Al Jandal wind farm, commissioned in 2021, which generates 400 MW of green energy and supplies clean energy to 70,000 households while offsetting 988,000 tonnes of carbon emissions annually.

The kingdom is actively pursuing innovative approaches to renewable energy development, particularly through the NEOM city project on the Red Sea coast. This smart city development includes plans for nine hybrid renewable energy systems (HRES), combining multiple renewable sources to optimize power generation and storage. The project exemplifies Saudi Arabia's commitment to advanced energy solutions, with research indicating that hybrid systems can achieve significant cost savings and environmental benefits compared to traditional power generation methods. This approach to integrated renewable energy systems represents a model for future sustainable urban development in the region.

Saudi Arabia Renewable Energy Market Trends

Government Initiatives and Vision 2030 Support

The Saudi Arabian government's Vision 2030 initiative, launched in 2016, has emerged as a powerful catalyst for renewable energy development in the country. This comprehensive strategic transformation roadmap encompasses financial, social, and environmental targets aimed at diversifying the economy and reducing dependence on fossil fuel exports. The government established the Renewable Energy Project Development Office (REPDO) within the Ministry of Energy in 2017, which oversees the National Renewable Energy Program (NREP) and is responsible for delivering on the ambitious renewable energy goals aligned with Vision 2030. Through this institutional framework, REPDO manages 30% of renewable energy project development through competitive tendering, while the Public Investment Fund (PIF) handles the remaining 70% through direct negotiations with developers.

The government has created multiple schemes and incentives to encourage private sector participation and foster market competition in the renewable energy sector. For instance, in February 2024, the Saudi Power Procurement Company (SPPC) announced qualified bidders for the fifth round of 3.7 GW solar projects under the NREP, attracting major international developers like EDF Renouvelables, Masdar, Itochu Corporation, and Total Energies Renewables. This demonstrates the government's commitment to creating a conducive environment for both domestic and foreign investments in the clean energy sector. The institutional-level coordination and supportive policy framework have established a strong foundation for sustainable market growth and are expected to continue driving the market throughout the forecast period.

Abundant Solar Resources and Natural Potential

Saudi Arabia's strategic geographical location in the middle of the "sun belt" provides exceptional natural advantages for solar energy development, particularly in power generation. The country receives an impressive average of 8.9 hours of sunshine per day and an average horizontal solar radiation of 5,600 Wh/m2. The solar irradiation level of 250 W/m2 significantly exceeds the global average of 100-200 W/m2 for high-potential solar areas, making Saudi Arabia an ideal location for solar energy projects. The capital city Riyadh exemplifies these favorable conditions with approximately 3,230 sunshine hours annually, a characteristic shared across the country's landscape, creating substantial opportunities for solar energy generation.

The abundant natural resources have attracted significant investment in utility-scale solar projects across the country. The government has recognized this natural advantage and incorporated it into their renewable energy strategy, planning to develop more than 35 solar and wind energy farms by 2030. The consistent availability of solar resources throughout the year ensures reliable power generation and attractive returns on investment for project developers. These natural advantages, combined with technological advancements in clean technology, have positioned Saudi Arabia as a prime location for renewable energy development and continue to drive market growth through improved project feasibility and operational efficiency.

Large-Scale Project Developments and Investments

The Saudi Arabian renewable energy market is experiencing substantial growth through the development of numerous large-scale projects and strategic investments. The National Renewable Energy Programme (NREP) has established an ambitious framework for project development, with plans to install nearly 58.7 GW of renewable energy capacity by 2030. This commitment has resulted in the implementation of various utility-scale projects across the country, creating a robust pipeline of renewable energy developments. The scale of these projects demonstrates the market's maturity and attracts both domestic and international investors, contributing to the sector's continued expansion.

The market has witnessed significant momentum in project announcements and implementations. For example, in February 2024, the fifth round of solar projects under the NREP introduced 3.7 GW of new capacity to the development pipeline, attracting major international players and establishing new benchmarks for project scale and efficiency. These large-scale developments are complemented by the government's commitment to localizing a significant portion of the renewable energy value chain, including research and development and manufacturing capabilities. The combination of project scale, strategic investments, and value chain development creates a self-reinforcing cycle that continues to drive market growth and attract additional investments in the sector. Furthermore, the integration of energy storage solutions and sustainable infrastructure in these projects enhances energy efficiency and supports long-term sustainability.

Segment Analysis: End User

Commercial & Industrial Segment in Saudi Arabia Renewable Energy Market

The commercial and industrial segment dominates the Saudi Arabia renewable energy market, accounting for approximately 99% of the total installed capacity in 2024. This significant market share is driven by the country's ambitious National Renewable Energy Program (NREP), which has led to the development of numerous utility-scale projects. The segment's dominance is reinforced by major developments like the Sudair project, which is set to become one of the largest single-contracted solar energy PV plants globally, with a capacity of 1,500 MW. Additionally, the Saudi Industrial Development Fund's Mutjadeda program, which grants up to USD 130 million for commercial projects to install renewable energy sources, has further strengthened this segment's position in the market.

Residential Segment in Saudi Arabia Renewable Energy Market

The residential segment in the Saudi Arabian renewable energy market is showing promising growth potential, supported by various government initiatives and regulatory frameworks. The Water and Electricity Regulatory Authority's framework for Small-Scale solar energy PV Systems, ranging from 1KW to 2MW for grid-connected PV systems, has created a structured pathway for residential adoption. Saudi power distributors are actively assisting consumers willing to install solar energy by providing necessary information for feasibility studies and grid connection applications. The segment's growth is further bolstered by the country's high electricity consumption in residential buildings, which accounts for almost half of the total electricity consumption, presenting a significant opportunity for transition to clean energy sources.

Segment Analysis: Power Generation Source

Solar Segment in Saudi Arabia Renewable Energy Market

Solar energy dominates the Saudi Arabia renewable energy market, accounting for approximately 99% of the total installed renewable capacity in 2024. The country's strategic location in the "sun belt" provides exceptional solar potential with average horizontal solar radiation of 5,600 Wh/m2 and solar irradiation of 250 W/m2, significantly higher than the global average of 100-200 W/m2 for high-potential solar areas. The capital city, Riyadh, alone demonstrates this immense potential with yearly average sunshine hours of 3,230 hours, representing conditions across the entire landscape. Under Vision 2030, Saudi Arabia is actively developing its solar energy capacity through numerous large-scale projects, with plans to develop 4,370 MW of solar energy that will power approximately 6.17 million houses through 12 solar projects under the National Renewable Energy Program (NREP).

Wind Segment in Saudi Arabia Renewable Energy Market

The wind energy sector in Saudi Arabia is experiencing rapid growth, driven by the country's ambitious renewable energy goals and favorable wind conditions. The country's annual average onshore wind speeds range between 6.0 and 8.0 m/s, with extensive areas registering speeds exceeding 7.0 m/s, particularly in the northeast, central regions, and western mountains. The government's commitment to installing 16 GW of wind energy by 2030, coupled with Saudi Arabia's 13th rank globally in terms of highest potential for onshore wind production, is expected to drive exponential growth in this segment during 2024-2029. This expansion is supported by various ongoing projects and initiatives under Vision 2030, which plans to develop more than 35 solar and wind energy farms across the Kingdom.

Remaining Segments in Power Generation Source

Other power generation sources in Saudi Arabia's renewable energy market, primarily including geothermal energy, represent emerging opportunities for diversification. The country possesses significant geothermal potential, particularly in the Harrat Rahat volcanic lava field in western Saudi Arabia and regions like Jazan and Al Lith on the Red Sea coast. The government's Vision 2030 includes plans to develop 1 GW of geothermal energy by 2040, demonstrating long-term commitment to this alternative energy source. The country also has ten hot springs with deep temperatures ranging from 50 to 120°C and three major harrats - Khaybar, Kishb, and Rahat - of geothermal interest, indicating substantial untapped potential in this sector.