Supply Chain Readiness for Solar PV Expansion in Saudi Arabia

Abstract

The Kingdom of Saudi Arabia (KSA) has an ambitious plan to install 40 GW of solar photovoltaic (PV) capacity via large scale projects (majority of which are >100 MW) across the country by 2030. These projects are required to achieve a threshold percentage of the overall project cost as in country expenditure, termed “local content”. This threshold will rise to 40–45% by 2028, ensuring solar projects do not simply become investment opportunities for overseas companies but deliver jobs and skills development within the Kingdom. Local content is assessed across all aspects of a PV system—module, inverter, structure, etc. Typically, the PV module cost can range between ~34% to ~44% of the overall system cost. However, 56% of this module cost represents the manufacture of the solar cells. To maximise local content, the opportunity for KSA lies in module fabrication of imported solar cells. This study assesses the capacity readiness of the KSA to meet this opportunity in relation to its 2030 targets and the current policy landscape. The recently completed 300 MW Sakaka project had a local content of >30% based on the developers’ website and >35% based on our private communication. Our results indicate that this would rise by 19% for a project like Sakaka if all modules were fabricated in-country rather than being imported. The work also projected a shortfall in terms of in-country module fabrication capacity with clear implications to local content targets. The results show a shortfall in the range of 35% to 75% by 2030 depending on the adopted KSA energy policies and government support. KSA is seen to have good capacity in other PV components such as steel and float glass. In-country distribution of imported solar cells to module fabrication centres and subsequent distribution to PV farm sites has also been assessed. Our analyses indicate that a two-location solution reduces cost with new module fabrication capacity sited near Jeddah and Riyadh, minimising storage times, delivery time to site and distribution waiting times.