The Kingdom’s economy has reached an inflection point – and it’s spurring a revolution in the way we produce, consume and trade energy.

The decade-long oil price boom of 2003-2013 rocketed Saudi Arabia’s economy into the stratosphere. Almost 90 percent of the Kingdom’s wealth was and is from oil – but times are changing. Cheap, subsidized oil was plentiful during the boom, providing businesses and citizens with easy energy at an incredibly low cost.

The fluctuation in global oil prices has brought the Saudi economy to a crossroads. With decreasing margins on oil exports, the oil subsidies are becoming less sustainable and, as a result, are going away. This has increased energy costs for Saudi businesses. In fact, commercial electricity costs have already doubled, and energy costs are only expected to increase.

While oil is still plentiful, the time it takes to extract and refine the oil, combined with a high rate of consumption, have created an unsustainable situation going forward. Based on a 2015 Mckinsey Report, if the current trend continues, the Kingdom will be forced to become a net importer of oil by 2038.

To address these issues and others, King Salman and the Crown Prince Mohammed Bin Salman have launched a strategy that will make monumental changes in the way the Kingdom’s economy and society at large operate. Saudi Vision 2030 lays out a revolutionary plan for the country’s economy – including a diversification of its energy supply through massive investments in solar energy. Energy diversification will be paramount, not only to grow the Kingdom’s economy, but to help the country maintain its status as the world leader in energy production.

The Saudi oil reserves are the stuff of legend, but the country also has an abundance of another type of energy – sunlight. Advancements in solar energy technology have reduced solar energy prices by more than 80 percent, and as a result are bringing Saudi solar energy into the mainstream. The opportunity for the Kingdom to become the world’s largest producer of solar energy is within reach. With more sunlight than almost every other country on earth and plenty of space to build solar farms, solar power – along with other alternative energies like wind and nuclear – will be one of the main economic drivers for Saudi Arabia over the next 100 years and beyond.

The Saudi government has put its money where its vision is, recently inking a $200 billion deal with Softbank Group to build the largest and most sophisticated solar farm in the world. The plant is expected to reach its full capacity by 2030, forever changing the way Saudi Arabia deals in energy.

The Saudi solar farm and government-funded solar power will eventually help Saudi businesses relieve the burden of energy costs, but many businesses are currently facing rising energy costs and will need to adapt and follow suit with the nations adoption of solar energy. Energy costs are already soaring, and an immediate fix is required. Some businesses have already had to close their doors to rising energy costs. As a result, many Saudi businesses have a great opportunity to install solar panels – and reap the benefits of reduced energy costs.

Energy from the sun is free. Harnessing solar requires an initial investment in solar panels, but the investment pays for itself in six to 10 years. And businesses who use solar don’t just reap the benefits of free energy – they essentially become individual producers of energy as well. With solar power, if you produce more than you use, that energy can be sold back to the grid – potentially for a profit.

The future of Saudi solar is certain. That’s why many the Kingdom is already investing in solar power to help fuel future economic growth, and the private sector will follow. While government incentives through financing programs and others have not yet been implemented for Saudi solar power (they will come as production ramps up), many businesses are finding that investing in solar panels now are boosting their bottom lines.

Sun Capture is a solar energy services company in Saudi Arabia helping Saudi businesses bridge the gap between the current rising energy demands and costs, and the coming national move towards affordable renewable energy. To learn more about how solar can help your energy needs and bring your business in line with Saudi Vision 2030, contact us today.

Saudi Arabia is the future. That’s the ambitious and progressive aim of Saudi Vision 2030. Led by King Salman and Crown Prince Mohammed Bin Salman, Saudi Vision 2030 aims to completely transform the Kingdom’s economy, society, and energy sector. The future of the Kingdom is one that is open to tourism, the global economy and renewable energy sources like solar energy.

The plan is more than the utopian reforms of a young, ascendant ruler – it’s an imperative shift in strategy designed to pave the path from oil-dependence into a vibrant and diverse economy that will ensure the Kingdom’s continued prosperity.

Innovation is set to occur at a rapid pace. We’ve always been a leader in energy, even though there has been heavy reliance on hydrocarbons and not enough utilization of several of the Kingdom’s vast natural resources. Saudi Vision 2030 institutes a much-needed top-down revolution, with the government leading the way in energy diversification through renewables, such as solar energy, and other cultural changes. It’s a grandiose plan, with numerous catalysts and development engines set in place.

The Tipping Point

The Kingdom has reached a tipping point that requires Saudi Arabians to modernize and embrace the future both culturally and economically. The cultural revolution has been spurred by a combination of youth – 70 percent of Saudi Arabians are younger than 32 – and growing access to new ideas through travel, and technology including social media. The younger generation is welcoming the catalysts of change.

The fluctuation of oil prices over the last few years was the catalyst that turned the Kingdom into oil-independence and diversifying its energy generation. Historically, the generous government subsidies for oil during the oil economic boom years made energy incredibly cheap, helping business expand their operations and grow the country’s economy. The oil subsidies have made alternative means of domestic energy production such as solar energy economically unfeasible. And the decrease in oil prices abroad in the past few years have made oil subsidies unsustainable moving forward. Now, businesses are struck with rising and  unanticipated electricity costs that threaten to stall our growing economy.

Saudi Vision 2030 is the blueprint to strengthen the Kingdom’s standing as a global energy leader and secure its continued economic prosperity for decades to come.

Energy in Abundance

 Saudi Arabia is known for having the richest oil fields. As a result, other natural resources have been overshadowed for decades. Among them, the Kingdom has the world’s most intense sunlight. Maps of solar radiation intensity shows the whole country covered in the highest solar ray levels. With vast desert lands, Saudi Arabia has unparalleled solar energy potential once utilized.

To this day, however, the Kingdom’s aging power generation plants have relied on fossil fuels to produce electricity. Using oil and diesel for energy production is less efficient compared to alternatives such as wind or solar. King Salman, and the Crown Prince Mohammed Bin Salman, have revealed that our continued reliance on oil will stifle our economic growth moving forward. Oil exports make up over 87 percent of the Kingdom’s GDP and increasing domestic energy demands requires an ambitious plan of energy diversification to foster future energy security and dominance around the globe.

Although Saudi’s vast oil supply is not going away, through Saudi Vision 2030, the way in which we consume it will. Internally, this means that future electricity generation power plants will utilize the most advanced technology and harness the nation’s renewable rich natural resources like solar energy. Saudi Vision 2030 outlines a bold plan to integrate alternative energy production into the economy – including nuclear power, wind power, geothermal power, and solar power. Saudi’s solar efforts, in particular, will assure the Kingdom regains its standing as the world’s largest producer of energy.

As one of the sunniest countries in the world, the ability to harness solar energy is well within reach. The Saudi government recently inked a deal to spend $200 billion building the world’s largest and most technologically advanced solar power farm. The solar project is slated to be up and running by 2023 – an aggressive but achievable target.

Another economic energy boom is on the horizon for Saudi Arabia. And this time, it’s coming from above, not below our feet. With renewable sustainable energy sources like solar power, the future of the Kingdom looks bright.

Sun Capture is a solar energy services company in Saudi Arabia helping Saudi businesses bridge the gap between the current rising energy demands and costs, and the coming national move towards affordable renewable energy. To learn more about how solar can help your energy needs and bring your business in line with Saudi Vision 2030, contact us today.