Saudi Arabia’s Cautious Approach to Solar Power Policy

Oliver McPherson-Smith

The desire to harness the power of the sun to meet Saudi Arabia’s energy needs is understandable. With intense, year-round solar radiation, as well as a vast expanse of land, the Kingdom is blessed with the physical requirements needed to take advantage of this source of renewable energy. Likewise, the opportunity cost of the countless barrels of oil that are currently used for power generation is a cause for considering alternative energy sources. While the neighboring United Arab Emirates may have taken an early lead in developing a solar generation capacity, Saudi Arabia has launched a variety of reforms and projects that are rapidly establishing the Kingdom’s presence in the solar energy sphere. Much media attention has been given to the most ambitious projects, such as the 200 gigawatt (GW) Softbank agreement of March 2018 and the reliance on renewable energy for NEOM, the transnational city and economic zone being constructed near Tabuk, and their feasibility has been widely discussed. However, the policies that have the greatest effect on the citizens of Saudi Arabia and the Kingdom’s business community are often overlooked. The successful development of the nation’s utility-scale photovoltaic capacity and tendering process, as well as the overhaul of electricity tariffs, are the building blocks on which Saudi Arabia’s most ambitious—and utilitarian—plans will rely. Unlike the volatile nature of the “megaprojects,” the Saudi government’s approach to these most crucial innovations has been marked by caution and gradual progression, in order to guarantee their success.