The Middle East has long struggled to establish a competitive solar manufacturing sector despite receiving abundant sunshine and increasing commitments to clean energy. However, recent developments suggest a rapid shift is underway. Governments are ramping up local content requirements, new factories are breaking ground, and regional players are positioning themselves as serious global solar supply chain contenders.

Once heavily reliant on imports, the region is awakening to the strategic value of producing its own solar technologies, to meet rising domestic demand and usher in a new era of economic diversification, energy security, and clean-tech leadership.

A January report by the Middle East Solar Industry Association (MESIA) indicates that solar module manufacturing in the MENA region likely exceeded 3 GW by the end of 2024. Production facilities in Iran, Saudi Arabia, Jordan, the UAE, Egypt, and Algeria drove this growth.

According to MESIA, this shift toward local manufacturing will reduce reliance on imports, create jobs, encourage innovation, and elevate the region’s status in the global solar supply chain, especially given its proximity to the European Union and sub-Saharan African markets.

“The region’s ongoing efforts to localize solar manufacturing and reduce dependence on external suppliers are crucial to the long-term success of MENA’s renewable energy strategy,” the report notes. “As countries such as Morocco, Egypt, and Tunisia continue to expand their solar capacities, MENA is not only meeting its energy demands but also contributing to the global clean energy transition.”

Energy Transition Imperative

Several factors are driving this transformation. The region’s abundant solar resources make it an ideal setting for solar energy generation.

Economic diversification is another powerful motivator. With fluctuating oil prices and the global energy transition underway, many countries seek to reduce their dependence on fossil fuels and invest in renewables.

According to the International Energy Agency (IEA), renewable generation in the Middle East is forecast to grow by approximately 14% annually from 2025 to 2027, with its share rising from 5% to 7%. Solar energy is expected to dominate this growth, increasing its share of renewable energy generation from 55% to nearly 70% by 2027. This trajectory underscores the opportunity to expand local manufacturing capacity and strengthen energy security by reducing dependence on imported technologies.

Emerging Hubs

Saudi Arabia is home to a growing cluster of solar manufacturing initiatives. Last year, the Saudi Authority for Industrial Cities and Technology Zones signed a contract with Desert Technologies to establish an industrial complex in Jeddah’s Third Industrial City. The facility, backed by a $199 million investment, will produce solar panels and cells with an annual capacity of up to 5 GW.

In Abu Dhabi, KEZAD Group and Abundance Solar Panels Industries have signed a 50-year land lease to build a 27,000-square-meter solar panel plant. The project will produce high-efficiency photovoltaic modules and aims to position KEZAD as a regional hub for new energy innovation.

In Dubai, companies like DuSol Industries and Almaden Solar continue production and are expanding to incorporate N-type cell technologies.

Another milestone is Singapore-based Gstar’s entry into the region. The company signed a memorandum of understanding to build a 2 GW solar module facility in the UAE, backed by Siraj Group, Galaxico, and Stark Consulting. The facility will produce N-type modules and could significantly boost the region’s manufacturing capacity.

Oman is also emerging as a key player. Aligned with its Vision 2040 and Net Zero 2050 goals, Sheida Industries, supported by National Finance, has launched Oman’s first solar panel manufacturing facility in the Sohar Industrial Area, covering 11,250 square meters. The country also invests in large-scale solar projects like the 500 MW Ibri Solar Plant, strengthening its renewable energy targets.

The MENA region saw a 25% increase in solar energy capacity in 2024, reaching 24 GW (AC). Over 80% of this growth was concentrated in Saudi Arabia, the UAE, and Egypt. Projections suggest regional capacity could exceed 180 GW by 2030, reflecting ambitious national targets and supportive government policies.

Raw Materials a Hurdle

Despite the momentum, challenges remain. A major hurdle is the heavy reliance on imported raw materials and components, especially from Asia, making local supply chains vulnerable to global disruptions. There is also a shortage of technical expertise and skilled labor needed to meet international standards for solar component manufacturing.

Financing remains another obstacle. Solar manufacturing demands substantial upfront capital, and competition from established global players can make it difficult for regional ventures to gain market traction. Inconsistent policy frameworks and the absence of clear, long-term incentives further complicate investment decisions.

Pathways to Progress

To overcome these challenges, countries in the region are introducing investor-friendly policies, including tax breaks, subsidies, and local content mandates. Partnering with international private firms is helping to share risk, drive innovation, and facilitate knowledge transfer.

Investments in research and development and the establishment of specialized solar research centers can improve the quality and competitiveness of locally produced technologies. Building a skilled workforce through vocational training programs and education initiatives is just as crucial to supporting the sector’s growth.

With rising investment, supportive policies, and growing regional cooperation, the Middle East’s solar manufacturing sector is beginning to take shape. While challenges remain, the region is well on its way to becoming a key player in the global clean energy transition.