Success Opportunities in Saudi PV Market

1. Saudization mandatory clause

Foreign-owned enterprises must transfer at least 30% of their equity to local entities (such as ACWA Power and PIF affiliates), and the proportion of Saudi citizens among employees must reach 40%. For example, Trina Solar's 3GW tracking bracket factory in Jeddah has signed a contract with the Saudi Industrial City and Technology Park Authority (MODON) to provide after-sales support through a local team to meet compliance requirements.

Impact: PV dealers must give priority to cooperating with companies with local qualifications, or avoid policy risks through a joint venture model.

2. Local content rate (LCR) threshold

Government bidding projects require 35% local procurement (such as battery pack assembly, BMS software development), which will be increased to 50% in 2025. JinkoSolar's 10GW battery module project jointly invested by JinkoSolar and PIF and TCL Zhonghuan's 20GW silicon wafer factory both meet LCR requirements by introducing local capital.

Strategy: PV distributors need to adjust the supply chain structure and increase the proportion of purchases from Saudi Arabia's local production links.

3. Carbon tariffs and energy efficiency labels

Taxes will be imposed on high-carbon imported products from 2027, and energy storage projects will need to purchase Saudi carbon credits (SCC) to offset emissions. At the same time, PV modules must comply with SASO 2883 standards and be registered and certified through the SABER platform.

Action: Give priority to low-carbon supply chains (such as modules produced using green electricity) and complete product certification in advance to avoid customs clearance delays.

1. Government-led GW-level projects

The Saudi Power Procurement Company (SPPC) recently signed a 5.5GW photovoltaic power purchase agreement, including the 2GW Hadden project in Mecca Province and the 1.5GW Al-Khushaybi project in Qassim Province. The 2.6GW Al-Shubach power station built by China Power Construction has been connected to the grid at full capacity, with an annual power generation of 4.4 billion kWh, covering 150,000 households.

Opportunities: PV dealers need to pay attention to SPPC quarterly bidding dynamics and participate in the component procurement of EPC general contractors.

2. Energy storage supporting demand explodes

Saudi Arabia plans to deploy 24GWh energy storage projects in 2024-2025. Sungrow's 7.8GWh energy storage order breaks the global record. The project covers three places including Najran and Madaya. After being connected to the grid in 2025, it can ensure the stability of the power grid.

Trend: PV dealers should integrate "PV + energy storage" solutions, such as matching 1500V liquid-cooled energy storage systems (such as Sungrow PowerTitan2.0) to enhance competitiveness.

3. Off-grid and microgrid market

The "Riyadh Declaration" proposed the "Photovoltaic Empowerment in Arid Areas" plan to promote off-grid water pumps, mobile energy storage and rural microgrids, with the goal of achieving an average of 1kW PV + electric tricycle + mobile energy storage per household.

Potential: Develop miniaturized, high-reliability components (such as 12V DC systems) for remote areas, and provide customized services in combination with localized operation and maintenance teams.

1. The continued impact of the Red Sea crisis

Going around the Cape of Good Hope has caused freight rates on the Asia-Europe route to rise by 2 times, and the logistics cost of exporting a single watt is close to RMB 0.17. Sungrow has eased transportation pressure by increasing inventory in the Middle East and using China-Europe trains.

Response: Establish regional storage centers (such as Dubai and Jeddah), and cooperate with logistics companies such as Kuehne + Nagel to customize end-to-end solutions.

2. Overcapacity and price fluctuations

Global component production capacity exceeds 800GW, and prices in the European market have fallen by 30% year-on-year. However, due to strong demand in Saudi Arabia, component prices are expected to stabilize at US$0.18-0.22/W in 2025.

Strategy: Prioritize long-term contract orders and sign annual procurement agreements with leading companies such as JinkoSolar and Longi to mitigate price risks.

3. Localized production replaces imports

Trina Solar, JinkoSolar and others have built factories in Saudi Arabia. In 2025, the local module production capacity will reach 30GW, accounting for 40% of the demand. Wholesalers need to adjust their procurement structure and gradually increase the proportion of local manufacturing.

1. Application of high-efficiency module technology

The Alschubach power station uses N-type bifacial modules + flat single-axis tracking system, which increases the power generation efficiency by 18%. TOPCon batteries perform better than PERC in the high temperature environment of the Middle East. The cleaning robot technology of Longi and Jinko can reduce operation and maintenance costs by 20%.

Choice: Mainly promote 210mm large-size, bifacial double-glass modules, with intelligent tracking brackets to increase power generation.

2. Energy storage system integration capabilities

Saudi Arabia's energy storage project requires a system cost of less than US$93/MWh. Sungrow's liquid-cooled energy storage system meets the demand through high-density cells (7.8 million cells/project) and fast delivery (grid connection in 30 days).

Supporting: Provide "PV + Energy Storage" turnkey solution, including grid stability testing and long-life design (more than 15 years).

3. Desert adaptability design

For dusty and high temperature (over 50℃ in summer), it is necessary to select anti-PID and salt spray resistant components and equip them with intelligent cleaning equipment. For example, Huawei's intelligent string inverter supports wide temperature operation (-40℃ to + 60℃).

1. Sovereign funds and local financing

PIF (Saudi Arabian Public Investment Fund) invests in photovoltaic projects through subsidiaries such as RELC, and the joint ventures of JinkoSolar and TCL Zhonghuan have introduced PIF capital. Photovoltaic dealers can obtain low-cost financing (interest rate 3-4%) through PIF-backed projects.

2. Exchange rate and payment risks

The Saudi Riyal (SAR) is pegged to the US dollar, but the project collection period is long (average 12-18 months). It is recommended to use US dollar settlement and purchase political risk insurance (such as Sinosure).

3. Compliance and legal risks

We need to be wary of "anti-circumvention" investigations in Europe and the United States, and give priority to components produced locally in Saudi Arabia. At the same time, we must comply with labor laws (such as the minimum wage for Saudi employees) and environmental regulations (such as eco-friendly power station design).