Saudi approves 106 firms to help hit solar power target

• Kingdom aims to have 68.1% of renewable power from solar by 2030
• 7GW of solar and wind projects announced in budget this year
• Solar power market may see 30% CAGR by 2025

Saudi Arabia has approved a list of 106 companies qualified to install solar power systems.

The decision aligns with the kingdom’s aim for 68.1 percent of its renewables capacity to be generated by solar power by 2030.

The Saudi Electricity and Water Regulatory Authority has qualified a list of both contractors and consultants to design, inspect, install and maintain small photovoltaic solar energy systems in homes and facilities.

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“The qualification of these companies confirms the development of the kingdom’s private sector,” said Majid Al-Rifaie, CEO of Desert Technologies Industries.

It is the first Saudi company to manufacture and export solar panels and one of the companies qualified by the Authority.

Al-Rifaie added that this would raise the demand from individual consumers, especially since the housing sector accounts for more than 50 percent of the market size, in addition to new cities such as Neom, Qiddiya, the Red Sea and Sandala.

He expects that the kingdom’s solar panel market will see a compound annual growth rate of 30 percent within the next two years, through an increase in international investments and the transfer of technology to local companies.

The latest efforts are part of a Saudi aim to localise its solar energy sector and become a global centre for the technology.

While all Gulf countries are increasingly working to incorporate such projects into their energy mix, the UAE and Saudi Arabia are leading the way in terms of the scale of projects and associated investment. 

Saudi wants solar power to contribute 40GW to its energy generation by 2030, accounting for the 68.1 percent target, according to the the Middle East Solar Industry Association.

This marks a 12.7GW increase from its current levels. Growth is to be driven by competitive auctions, bilateral utility contracts, corporate power purchase agreements and state-owned projects. 

The kingdom announced the development of 10 new solar and wind energy projects in its 2023 budget, as part of its strategy to slash oil use in electricity generation. They will have a combined total output capacity of 7GW. 

Romain Riche, international development director at the Association, said: “There is no doubt that Saudi Arabia will record the largest growth in capacity in the region [to achieve its 2030 target].”