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.