Solar has reached a critical inflection point. Once seen as an alternative, it is now the most cost-effective and fastest-growing source of new power worldwide. Across the Middle East, that shift is reshaping how clean energy companies build, localize, and scale technology.

Speaking on the sidelines of the World Future Energy Summit in Abu Dhabi, Dan Shugar, CEO of Nextpower, said the company has long viewed the Gulf as a core market and is now expanding its regional manufacturing footprint to meet rising demand.

For Nextpower, which supplies solar tracking systems, that strategy increasingly centers on producing equipment closer to project sites. “We’ve been active in the region for a long time,” Shugar said.

He pointed to early projects in Saudi Arabia and the UAE, including the Sakaka solar power plant and work with Dubai Electricity and Water Authority. “We now see the region as a supply chain hub,” he said, adding that the company operates from Dubai and supports projects across the Emirates.

That approach has taken a more formal shape through Nextpower Arabia, a joint venture with Abunayyan Holding aimed at supporting Saudi Arabia’s renewable energy targets and local manufacturing objectives under Vision 2030. The venture is expected to receive about $88 million in equity and debt financing over the next two years.

Headquartered in Riyadh, the partnership includes a manufacturing facility in Jeddah that will produce solar tracking systems for utility-scale projects across the Middle East and North Africa. The 42,000-square-meter facility could employ up to 2,000 people and support an annual production capacity of 12 gigawatts.

“We have regionalized many manufacturing facilities and the market—it’s the largest market in this region,” said Shugar. “UAE is also a very strong market, and we’re taking more of a regional approach, so this particular site is closest to the largest projects, and could also support UAE and some of the adjoining areas, and we’re considering additional manufacturing investments in the region too.”

Shugar said the rationale for regional production extends beyond cost. “People want to build products they use in the communities they’re in. They don’t want things built in faraway places, so we’ve migrated since the pandemic to that kind of strategy where we build products in the markets we serve.”

Globally, Nextpower has deployed about 150 gigawatts of solar tracking systems across 45 countries. Shugar said demand has accelerated in recent years as clean energy has become more economically competitive. “We went public three years ago, and the company has grown, and our backlogs have grown significantly because people need clean energy,” he said.

“Solar has been the fastest growing energy technology for over a decade because of economics, and about five or six years ago, we crossed an inflection point where solar, on a fully unsubsidized basis, became the lowest cost way to generate power.”

He said growth is now being reinforced by rising electricity demand linked to electrification and digital infrastructure. “What’s new in the last few years is the rate of new energy growth has really skyrocketed for a variety of reasons – electrification of end use, including vehicles, data centers, and AI,” Shugar said. “We’ve been serving data center customers for many years, over six years. But what’s new is how energy-intensive those sites are. There’s also a race to get new power to be able to build out to scale these data centers.”

In the Gulf, solar deployment is increasingly tied to power availability rather than sustainability targets alone. As electricity demand rises, especially from data centers and other energy-intensive industries, governments and developers are accelerating new capacity additions to avoid bottlenecks that could limit growth.

Shugar said local manufacturing also helps address logistical and regulatory considerations. “There are logistic savings. You don’t have to transport goods over a long distance. There are also localization scores for the economic value of creating products within markets, and being in the market is beneficial, because you can tailor your products for specific market requirements.”

Despite ongoing challenges, Shugar said solar’s role in the region’s energy mix is set to expand. “I want to see solar as the number one source of power generation in every major market we’re serving. And I think it’s going to happen in the Emirates. It’s going to happen in the KSA because solar is unstoppable. There’s been so much technological progress. The efficiency is fantastic. The product is super durable.”