The [Saudi] government sells gasoline to consumers for about 50 cents a gallon and electricity for as little as 1 cent a kilowatt-hour, a fraction of the lowest prices in the United States. As a result, the highways buzz with Cadillacs, Lincolns, and monster SUVs; few buildings have insulation; and people keep their home air conditioners runningoften at temperatures that require sweaterseven when they go on vacation.
Saudi Arabia produces much of its electricity by burning oil, a practice that most countries abandoned long ago, reasoning that they could use coal and natural gas instead and save oil for transportation, an application for which there is no mainstream alternative. Most of Saudi Arabias power plants are colossally inefficient, as are its air conditioners, which consumed 70 percent of the kingdoms electricity in 2013. Although the kingdom has just 30 million people, it is the worlds sixth-largest consumer of oil.
Now, Saudi rulers say, things must change. Their motivation isnt concern about global warming; the last thing they want is an end to the fossil-fuel era. Quite the contrary: they see investing in solar energy as a way to remain a global oil power.
The Saudis burn about a quarter of the oil they produceand their domestic consumption has been rising at an alarming 7 percent a year, nearly three times the rate of population growth. According to a widely read December 2011 report by Chatham House, a British think tank, if this trend continues, domestic consumption could eat into Saudi oil exports by 2021 and render the kingdom a net oil importer by 2038.
That outcome would be cataclysmic for Saudi Arabia. The kingdoms political stability has long rested on the ruling bargain, whereby the royal family provides citizens, who pay no personal income taxes, with extensive social services funded by oil exports.
[...] Three years ago, Saudi Arabia announced a goal of building, by 2032 [delayed to 2040], 41 gigawatts of solar capacity, slightly more than the world leader, Germany, has today. According to one estimate, that would be enough to meet about 20 percent of the kingdoms projected electricity needsan aggressive target, given that solar today supplies virtually none of Saudi Arabias energy and, as of 2012, less than 1 percent of the worlds.
[...] The goal, he said, is not just to install solar panels across Saudi Arabia but to export thema way, Saudi officials hope, to create high-paying tech jobs for the kingdoms large population of young people. (Some two-thirds of Saudis are younger than 30.) Officials also want to bankroll solar installations in other countries, to boost the market for Saudi-made panels. Among the potential locations is the United States, where Turki envisions the kingdom undercutting other solar providers in part by tapping cheap development loans from Saudi banks.
