Oil giant Saudi Arabia Is Emerging as a Solar Power

The kingdom is betting that sunshine can power new AI data centers and help boost oil exports

- Ed Ballard

The world's ultimate petrostate is turning to solar power. Saudi Arabia is building some of the world's biggest solar farms, along with giant arrays of batteries to store their electricity till after dark. The rapid rollout is making the country into one of the fastest-growing markets for solar power from a near-standing start.

The kingdom is betting that sunshine can transform its economy and bolster its coffers. It needs electricity for new tourism resorts, factories and AI data centers. Green energy could also squeeze more value from the fossil fuels that made the kingdom rich. Saudi Arabia burns oil to generate electricity; embracing alternatives frees up barrels for export.

The spread of glass across the desert is one of the starkest illustrations yet of how the plummeting cost of Chinese-made solar panels and batteries is changing how the world generates power, even as the U.S. takes aim at renewables.

"Today, solar is the cheapest, the fastest, the simplest and the most secure source of energy that you can install," said Marco Arcelli, chief executive of ACWA Power, the company driving the Saudi grid overhaul.

Saudi Arabia aims to get half its electricity from clean sources by 2030. ACWA, whose largest shareholder is Saudi Arabia's sovereign-wealth fund, is charged with delivering most of the new power needed to hit the target—roughly 100 gigawatts of capacity. That's a lot for a country that last year had roughly 4 gigawatts of installed solar, about as much as South Dakota.

Ramping up clean energy was part of Crown Prince Mohammed bin Salman's grand plan to diversify the kingdom's economy, announced in 2016. For years, progress was scant, even as the country began megaprojects including Neom, the futuristic city in the desert. A $200 billion solar project unveiled by Japan's SoftBank in 2018 was shelved within months.