Renewable Energy in Saudi Arabia 2025

Saudi Arabia’s renewable energy sector in 2025 is scaling rapidly toward the Kingdom’s target of generating 50 percent of electricity from renewable sources by 2030. This requires approximately 130 GW of renewable capacity, representing one of the most ambitious national renewable energy programmes globally. Solar photovoltaic and wind power lead the build-out, while green hydrogen emerges as a transformational export opportunity.

Installed Capacity and Pipeline

Operational renewable capacity has grown significantly from near-zero in 2018. Major operational projects include the 1.5 GW Sudair Solar Plant (one of the world’s largest), the Dumat Al Jandal wind farm (400 MW), and multiple solar projects awarded through competitive REPDO auctions. The project pipeline includes dozens of additional solar and wind projects in various stages of development and construction.

REPDO continues to conduct competitive auctions, attracting some of the world’s lowest solar energy tariffs. Saudi Arabia’s exceptional solar irradiance (among the highest globally) enables cost-competitive solar generation at utility scale.

ACWA Power

ACWA Power, a PIF-backed developer listed on the Tadawul, is the leading renewable energy developer in Saudi Arabia and one of the largest globally. ACWA Power develops, owns, and operates renewable energy and water desalination projects. Its growing portfolio of Saudi projects makes it the primary public equity vehicle for exposure to Saudi renewable energy growth.

Green Hydrogen

The NEOM Green Hydrogen Company (a joint venture between NEOM, ACWA Power, and Air Products) is developing a green hydrogen facility powered by 4 GW of dedicated solar and wind capacity. The facility will produce green ammonia for export, positioning Saudi Arabia as a first mover in the green hydrogen economy. Additional green hydrogen projects are under development across the Kingdom.

Grid Integration

The Saudi Electricity Company (SEC) and the Electricity and Cogeneration Regulatory Authority manage grid integration of renewable capacity. Grid modernisation, including transmission line expansion, smart grid technology, and battery energy storage systems, is essential to accommodate the intermittent nature of solar and wind generation.

Energy Storage

Grid-scale battery storage is being deployed alongside renewable projects to manage intermittency. Saudi Arabia’s storage requirements will grow substantially as renewable penetration increases. Battery technology, including lithium-ion and emerging alternatives, represents both a deployment and manufacturing opportunity.

Carbon Capture

Alongside renewables, Saudi Arabia is investing in carbon capture, utilisation, and storage (CCUS) as part of its circular carbon economy framework. Aramco’s existing CCUS facilities capture millions of tonnes of CO2 annually, with plans for significant expansion.

Fiscal and Regulatory Support

Renewable energy projects benefit from long-term (typically 25-year) power purchase agreements backed by the Saudi Power Procurement Company. The PPAs provide revenue certainty that underpins project financing. The regulatory framework for distributed solar (rooftop and commercial) is developing, with net metering provisions in early stages.

Economic Impact

The renewable energy build-out creates jobs in construction, operations, and maintenance. Manufacturing opportunities exist for solar panels, wind turbine components, inverters, and energy storage systems. The government encourages local manufacturing through procurement preferences and industrial zone incentives.

Challenges

The scale of the renewable build-out requires massive investment in generation, transmission, and storage simultaneously. Sand and dust reduce solar panel efficiency, requiring cleaning technology and maintenance protocols. Grid stability during the transition from thermal to renewable generation requires careful management. Financing the build-out requires a combination of public and private capital at unprecedented scale.

Saudi Arabia’s renewable energy trajectory in 2025 is clear and accelerating. The economic logic — freeing oil for export, reducing emissions, building new industries — ensures sustained policy commitment regardless of oil market conditions.

See our How to Invest in Renewable Energy and Saudi Green Initiative.