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Large companies in Saudi Arabia adopt solar energy while they seek to save energy costs after the government has eliminated electrical subsidies in the largest oil exporter in the world.
Encouraged by the reduction in the costs of the photovoltaic panel and the objectives of sustainability of the state, several large companies, in sectors ranging from logistics to retail, have installed solar panels on the roof in recent months.
The Saudi government wants half of the kingdom's electricity production from renewable sources by 2030 and reach Net Zero by 2060.
But the experts claim that the critical factor stimulating the recent solar acceleration could be the supractions of the energy grants which started in 2018 in the context of broader economic reforms, which included the deployment of large -scale renewable projects.
“We have invested in solar energy and in fact, it is reimbursement,” said Mazen Fakeeh, president of Fakeeh Care Group. “We have managed to reduce our carbon footprint, we have managed to reduce costs, although marginally because solar is not cheap and capital investment is important.”
The PV panels, installed on the roof of the company on several floors of the company near a group of hospitals on Palestine Street in Jeddah, helped the group save more than 170,000 SR ($ 45,000) on electricity bills in 2024.
“It is a long-term investment, so to see the full return on investment, you need two or three decades, in fact. But we are encouraged by the initial results,” he said.
Faris Al-Sulayman, co-founder of Hala Energy, a local start-up that helps companies build solar energy systems, said there was a clear difference in demand between commercial and industrial customers.
“Commercial customers, shopping centers, warehouses and Cetera, who pay the highest electricity rate at 0.30 SR per kilowatt-hour, are much more receptive to profitability analysis for solar energy on the roof,” he said. “Industrial customers, who pay a lower price of SR0.18, are less reactive.”
Saudi companies that are part of multinational groups such as IKEA and GSK have deployed solar energy to the encouragement of their mother companies, which have sustainability objectives. Responding to these expectations was also a factor for other Saudi groups, including logistics and transport companies, which have links with Western markets.
“The main objective is to contribute to the sustainability of the supply chain in a positive way because, in the end, this is also recognized by our suppliers, suppliers and partners,” said Amr Elmansoury, director of the Tamer group supply chain, which was founded in 1922.
“We associate ourselves with more than 200 suppliers around the world of different industries, and they also have their own objectives with regard to green.”
However, the company saved more than 440,000 SR by energy efficiency and reduces public services costs last year after having installed solar panels on its logistics poles in Jeddah and Riyadh. Its objective is now to extend this to all its main distribution centers within two years, said Elmansoury.
The change was helped by the supply of cheaper Chinese manufacturing PV modules. Greenfield Foreign Direct Investment from China to the Kingdom from 2021 to October from last year totaled $ 21.6 billion. About a third was addressed to clean technologies such as batteries, solar and wind, according to investments followed by the IED markets.
But the experts said that the most important driver could be the reforms of Crown Prince Mohammed Bin Salman to reduce subsidies and diversify the economy, which increased the 44% diesel prices last year.
“Although the decrease in the cost of renewable energies has also played a role, the orientation of the budgetary reform of the Saudi government – including changes in energy subsidy – has been a very important factor to encourage companies to actively consider electricity production options beyond fossil fuels,” said Shigeto Kondo, principal researcher of the Institute of Energy Energy.
