The future of renewable energy in Saudi Arabia

This is a thought leadership report issued by the S&P Global Institute. 

Policy‑led scale drives Saudi Arabia’s emergence as a renewables powerhouse

Saudi Arabia began expanding its renewable energy resources in 2019 with the completion of the 300-megawatt Sakaka solar farm. Since then, more than 10 GW of utility-scale solar PV have been connected to the grid, raising total power generation capacity to 110 GW, with current peak demand at 75 GW. While Saudi Arabia is often linked to rich oil and gas reserves, the rapid build-out of renewable resources has positioned the country as a leading destination for renewable power investors and technology providers. 

This expansion is best understood through the lens of Saudi Vision 2030, which has reshaped the country’s strategy by prioritizing the reduced reliance on oil-fired generation via the fast-tracking of renewable power projects. Saudi Arabia’s Renewable Energy Project Development Office has attracted international consortia to bid as developers through a series of tenders for clearly identified project sites, while the country’s Public Investment Fund (PIF) has developed renewables projects with its portfolio companies: ACWA Power, Saudi Aramco and Badeel. This policy push has unlocked substantial investment, with the country’s abundant flat land and high solar irradiance providing strong foundations. These projects are characterized by scale and efficiency, achieved through centralized and standardized specifications that streamline bidding and minimize permitting constraints. As a result, winning tender bids are consistently among the lowest globally — less than 2 cents per kilowatt-hour for solar and less than $80/kWh for battery energy storage systems (BESS). In other major markets, winning tender bids can be twice as high. 

Utility-scale solar PV projects dominate Saudi Arabia’s renewable power build-out. As of September 2026, more than 50 GW of grid-connected solar PV projects had been built or were in planning stages, along with 9 GW of wind and 11 GW of BESS. Wind deployment has progressed more slowly, underlining the complexity of global wind energy supply chains. The 400-MW Dumat Al Jandal wind project was completed in 2022, and another 1.1 GW is set for completion in 2026. BESS project development started later than both solar and wind but has already resulted in more than 2 GW in operation. 

The continued deployment of all three renewable technologies contributes to the Vision 2030 goal of eliminating oil-fired power from the grid and positions Saudi Arabia as a pioneer in the global renewable energy landscape as it continues to attract firms with cutting-edge technology to its tenders.

Localizing clean technology manufacturing reshapes global supply chain

Growth in the domestic solar market and an increasingly complex geopolitical landscape have accelerated renewable energy manufacturing in Saudi Arabia, building on an already maturing and diversifying manufacturing sector.

Vision 2030 pairs the rapid domestic deployment of renewable energy resources with a strategy to localize manufacturing and build industrial depth. Alongside fulfilling local content criteria, Saudi renewables manufacturing appeals to companies seeking to diversify their global supply chains. Stricter policies on supply and energy security are prompting large renewable equipment suppliers to prioritize locations that offer long‑term policy clarity and scale. 

Solar tracker suppliers, which have established over 40 GW of capacity, were the first to enter Saudi Arabia to support their projects in the domestic market and to export. Plans are underway to build a solar module supply chain across multiple nodes. Joint venture projects between JinkoSolar, PIF subsidiary Renewable Energy Localization Co. and Vision Industries to build 10 GW of solar modules and 10 GW of cell capacity would enable Saudi Arabia to manufacture its own modules by importing wafers. 

Leveraging renewable resources to become a major renewable hydrogen and derivatives exporter

Saudi Arabia is one of more than 50 countries with a national hydrogen strategy. The renewable hydrogen production targets announced in 2020 aim for 1.2 million metric tons per year by 2030 and 4 million mt/y by 2035. Like most hydrogen targets, these ambitions face ongoing headwinds. Delays in implementing policy mechanisms among importers, including the EU, and uncertainty about demand mean that markets focused on exports are less likely to meet targets, as they will hold back investment in renewable hydrogen production unless offtake is secured.

The structure of Saudi Arabia’s renewable hydrogen project pipeline differs from other regions. There are fewer than 10 announced projects in Saudi Arabia, compared to over 900 in the EU. In Saudi Arabia, the focus is on constructing a few large-scale, export-focused projects instead of multiple small-scale projects seeking domestic offtake.  

Two renewable hydrogen projects under development in Saudi Arabia are the NEOM Green Hydrogen Project and Yanbu Green Hydrogen Hub, with 2.2 GW and 4 GW of capacity, respectively. The NEOM advanced renewable hydrogen project completed construction in August 2026 and is the largest of its kind. The Yanbu project is in the front-end engineering phase, with Danish technology company Topsoe being awarded an ammonia licensing contract in January 2026. Commercial operations for Yanbu are expected by 2030. 

Air Products and Chemicals Inc. was originally listed as the sole offtaker for NEOM, but finalized a deal with Yara International ASA in August 2026 to allow the latter to market and distribute any ammonia that Air Products cannot sell. 

In February 2026, ACWA Power announced a memorandum of understanding with Germany-based VNG AG and Verbundnetz Gas Agbo and EnBW Energie Baden-Württemberg AG to create a “green ammonia corridor” from the Yanbu project to the Port of Rostock in Germany, where VNG would convert ammonia into green hydrogen for the German market.

This agreement is the latest in a series aimed at developing the hydrogen supply chain between Saudi Arabia and Europe as importers seek to capitalize on Saudi Arabia’s cost advantage. Optimized production cost estimates for renewable hydrogen and ammonia are $3/kilogram and $600/mt, respectively, which are about half the estimated production costs in Europe. S&P Global Energy forecasts Saudi Arabia to hold a 5%-6% share of global hydrogen exports until 2050. Projects including NEOM and Yanbu will enable Saudi Arabia to carve out an initial share of the traded market, with Saudi Arabia’s position as one of the world’s lowest-cost exporters expected to continue throughout the forecast. 

Having emerged as a major solar energy market, Saudi Arabia is entering the next growth phase. Investment is set to accelerate clean technology deployment and production, supported by policies under the Vision 2030 strategy. Geopolitical and global market uncertainties may slow parts of the industrial build-out, but Saudi Arabia’s goal to become a clean technology hub is clear.

The realization of this ambition will depend on factors including sustained renewables capacity additions and the country’s continued effectiveness in supporting the diversification of solar supply chains. Beyond power, projects such as NEOM and Yanbu will be central to Saudi Arabia’s expanding influence in the global hydrogen market. These advancements will not only shape Saudi Arabia’s energy future, but its involvement in the global energy transition.