“The Middle East and North Africa (MENA) region has become a favoured hub for PV manufacturing driven by the governments’ policies of the countries,” Yana Hryshko, senior analyst and head of global solar supply chain research at Wood Mackenzie, told PV Tech Premium exclusively. “Saudi Arabia, Egypt, the UAE and Oman aim to build a domestic supply chain.”
Appetite for new solar capacity in MENA region is growing, with deployments on pace to reach 140GWdc by 2030. The same is true for solar manufacturing, with regional capacity forecast to hit 44GW by 2029. Demand is accelerating, with module imports from China doubling to 27GW in 2024, driven by utility scale projects in Saudi Arabia, UAE and Oman.
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Governments and manufacturers are shifting rapidly towards a vertically integrated model that mirrors China’s approach, incorporating upstream materials to reduce import dependence. According to Hryshko, the region is on pace to achieve module self-sufficiency by 2026, marking a decisive shift in global solar supply dynamics.
Government policies driving growth
Interestingly, according to Hryshko, there are no inherent advantages to manufacturing solar products in the Middle East; instead, manufacturers are supported by government initiatives that aim to expand domestic manufacturing capacity.
“I don’t think MENA is naturally an attractive region for manufacturing. It wouldn’t be my first choice, as there are no inherent advantages—it is purely driven by government incentives,” she said.
“There is no real market incentive to build wafers and modules, and the Middle Eastern market is not known for attractive prices,” Hryshko continued. “The whole vertical integration in the region is purely based on government initiative.”
Indeed, governments across MENA, led by Saudi Arabia, the UAE, Oman and Egypt, are courting experienced global manufacturers to co-invest in domestic solar production. Last year, Bahraini, Chinese, Egyptian and Emirati groups agreed to develop a 2GW solar cell and module, plus 1GWh battery energy storage system (BESS), facility in Egypt, while this month, United Solar launched the Middle East’s largest polysilicon plant in Oman’s Sohar Free Zone, adding 100,000 metric tons of production capacity to support 40GW of modules annually.
Backed by public capital and incentives, these partnerships are accelerating the buildout of integrated manufacturing hubs.
“They partner with Chinese manufacturers, who build it for them,” explained Hryshko. “Economically it doesn’t make sense, but strategically it does.”
Chinese companies are set to account for more than 85% of MENA’s solar module manufacturing capacity by 2028, positioning the region as China’s next key production base outside Asia.
“The governments want to create a manufacturing hub and local markets,” added Hryshko. “They are imposing domestic content requirements (DCR) to meet the quality, building several projects, and developing special economic zones (SEZs), infrastructure, and the supply chain.”
Hryshko noted that the MENA states are pursuing a long-term strategy, prioritising scale, advanced technologies and sustained growth in manufacturing capacity over short-term returns or narrow localisation.
“From a strategic perspective, the Gulf states have vision,” she said. “They are investing in clean tech and broader manufacturing because relying solely on oil is no longer sustainable. They are planning for the long-term future, which is impressive.”
Tariff haven for the US market
The MENA region is positioning itself as what WoodMac called a “tariff haven” for solar manufacturing, particularly for buyers in the US, as it benefits from a comparatively low 10% basic tariff on modules exported to the US. That compares with duties of up to 651% faced by producers elsewhere, giving MENA-based manufacturers a significant cost advantage and reshaping global trade flows
“For several years, the main manufacturing hub for the US was in Southeast Asia,” explained Hryshko. “Then the US imposed multiple tariffs and duties on Southeast Asian countries and Chinese manufacturers there, making it logical for Chinese manufacturers who want to continue working with the US to build facilities elsewhere.
“They were looking for the next manufacturing hub with easy access to the US. Additionally, MENA has a promising local market and access to Europe.”
According to Hryshko, MENA is expected to displace Southeast Asia as the primary exporter of solar panels to the US.
“The US has a close strategic relationship with the MENA states. If you look at the reciprocal tariffs imposed by the Trump administration, all the countries in the region got the basic 10% tariff because of it,” said Hryshko.
This momentum is underpinned by tightening local content requirements and strategic partnerships with Chinese firms. Saudi Arabia is leading the push, targeting 40-45% localisation by 2028 and 75% by 2030. SEZs are being rolled out to streamline operations, cut logistics costs and attract capital.
In 2023, Saudi Arabia’s Economic Cities and Special Zones Authority (ECZA) announced four new SEZs. Meanwhile, Oman is developing Duqm Special Economic Zone (SEZD) and Al Rawdah Special Economic Zone to create a regional hub for manufacturing. Similarly, Egypt is expanding its Suez Canal Economic Zone (SCZONE) and Sokhna region, while Dubai Multi Commodities Centre (DMCC) remains a top-ranked global free zone in UAE.
Furthermore, speaking about the potential imposition of anti-dumping and countervailing duties (AD/CVD) that have undermined exports of Southeast Asian solar products to the US, Hryshko said: “I highly doubt that they will impose AD/CVD duties, because everyone is subsidising on manufacturing right now; take the Inflation Reduction Act (IRA) for example. I do not think that they will take that step.”
Challenges in the MENA region
Hryshko highlighted several hurdles for solar manufacturing in MENA, including overdependence on China for wafers and modules, reliance on the US market for exports, grid infrastructure weaknesses, and policy execution challenges.
“This is not only about global politics—it’s about supply chain risks, which every procurement manager deals with daily. About 95-98% of wafer capacity is in China, and even those outside China are also Chinese. I think relying on one country is risky. There are already conflicts and having the entire solar industry dependent on one country is foolish.”
She noted that some large announcements by Chinese companies have yet to materialise, often due to complex partnerships with government funds.
Hryshko emphasised market diversification. “Don’t rely only on one market. Diversify your supply chain. Africa is a very underestimated market. The import of solar panels in Africa in 2025 skyrocketed.”
She also highlighted decentralised energy solutions. “The grid infrastructure moving to decentralisation right now, like it’s microgrids. The direction that the government will take is energy decentralisation, and I think it should be the direction for everyone. Having it centralised is not a good idea.”
“There is always a risk, and the Middle East is not known for the most stable political condition. But in the next four years, the countries need to build a solar supply chain and get it up and running. I think that they can do it with strategic support,” Hryshko concluded.
