Saudi Arabia renewable energy market seen reaching $18.3 billion by 2035

Saudi Arabia’s renewable energy market is projected to expand from $6.51 billion in 2026 to $18.30 billion by 2035, fueled by Vision 2030, a 33 GW-plus project pipeline and aggressive solar and wind procurement. The forecast points to Saudi Arabia becoming a bigger global player in utility-scale renewables, battery storage and green hydrogen.

Why it matters: - Saudi Arabia is moving from a fossil-fuel-heavy power system toward a large-scale renewable buildout with implications for electricity supply, industrial demand and export ambitions. - The market forecast signals long-term investment opportunities across solar, wind, storage and green hydrogen as the Kingdom works toward its 2030 and 2060 climate and energy targets. - A larger renewable base can also reduce domestic oil use in power generation and support the country’s broader economic diversification plan.

What happened: - The Saudi Arabia renewable energy market was estimated at $5.80 billion in 2025 and is projected to reach $6.51 billion in 2026 and $18.30 billion by 2035. - The forecast implies a 12.2% compound annual growth rate from 2026 to 2035. - Vision 2030 aims to source 50% of Saudi Arabia’s power from renewable sources. - The project pipeline exceeds 33 GW, while annual tenders are targeting 20 GW of new capacity. - Renewable energy accounted for 12% of total electricity production in 2025, up from less than 1% a few years earlier. - Saudi Arabia connected 12.3 GW of renewable projects to the national grid in 2025.

The details: - Solar remains the dominant source, representing about 87% of installed renewable capacity. - Major solar projects include the 2.6 GW Al-Shuaibah plant, the 1.1 GW Al Henakiyah (1) Solar PV Plant and the 300 MW Sakaka PV IPP. - Wind is the fastest-growing segment, led by the 400 MW Dumat Al-Jandal wind farm, the 500 MW Wadi Al Shamal Wind Farm and the 3 GW PIF5 wind projects. - The PIF5 wind projects are described as the world’s largest onshore wind development under construction. - Battery storage is becoming a core part of the market, with 30 GWh of battery storage projects launched and 8 GWh already connected to the grid. - Saudi Arabia is also developing a 5.5 GW / 22 GWh battery energy storage pipeline and targeting 48 GWh of storage capacity by 2030. - Concentrated solar power is forecast to grow at a 13.9% CAGR through 2035, supported by molten-salt storage integration. - The Kingdom is deploying 1,200 meteorological masts across 850,000 km² to map wind and solar resources. - The government is exploring geothermal potential along the Red Sea coast and investing in green hydrogen projects at NEOM and the planned Yanbu Green Hydrogen Hub. - The Saudi Power Procurement Company serves as the offtaker for NREP projects, providing revenue certainty. - The government is also requiring certain companies to source part of their power from renewables in new projects. - The Liquid Fuel Displacement Program is designed to replace heavy fuel oil and diesel with cleaner electricity. - Utility-scale solar PV is the largest technology segment, while utility-scale wind is rapidly expanding on the back of record-low tariffs. - The Al Henakiyah plant achieved a tariff of 1.6842 cents per kWh. - The Al-Ghat wind project achieved a tariff of 1.56558 cents per kWh.

Between the lines: - The market’s rapid growth is being driven less by consumer adoption and more by state-directed procurement, grid planning and long-term policy certainty. - Saudi Arabia’s edge is not just resource quality. The country is pairing strong solar and wind conditions with a large tender pipeline and financing support that lowers project risk. - The biggest constraint is no longer generation technology alone. Storage, grid integration and cost perception are becoming the main hurdles as renewable penetration rises. - Green hydrogen and data center demand point to a second phase of growth, where renewables are tied to industrial exports and digital infrastructure, not just domestic power.

What’s next: - Large solar and wind awards are likely to continue through the National Renewable Energy Program’s rolling tenders. - More battery storage projects are expected as Saudi Arabia works toward higher renewable penetration and grid reliability. - Green hydrogen development at NEOM and Yanbu is likely to remain a centerpiece of the Kingdom’s clean energy export strategy. - Offshore and remote-site solar-plus-storage deployments are expected to keep expanding for oil and gas, telecom and industrial users. - Local manufacturing in solar, wind and batteries may gain more traction as the market scales.

The bottom line: - Saudi Arabia’s renewable energy market is entering a multi-year expansion cycle, with policy backing, giant projects and falling tariffs positioning the Kingdom as one of the world’s most important clean energy buildouts.