Saudi Arabia has signed an agreement with SunEdison of Belmont, California, to explore building a $6.4 billion solar panel plant at Wa'ad Al Shammal, in the northern part of the kingdom.

According to U.S. press reports, the facility would produce enough photovoltaic solar modules annually to generate three gigawatts of electricity annually, equivalent to the output of three nuclear reactors.
SunEdison CEO Ahmad Chatila said in a statement that the project will support the expected substantial growth in solar photovoltaics within the kingdom and the region. Government investment agencies are reportedly footing the bill.

With oil resources no longer expected to be a ticket to long-term wealth, Saudi Arabia and its companies are increasingly seeking other opportunities for growth. Sabic CEO Mohammed Al Mady last year said his company was interested in becoming involved in a U.S. shale gas project.

The Saudi government also has set ambitious targets for renewable energy. About a third of the country's energy output is targeted to come from renewables by 2032. The government of the United Arab Emirates is building an entire community, Masdar City, planned to run solely on renewable energy.
Energy consultants noted that while Saudi Arabia has the right climatic conditions for solar power, it has some way to go before developing the market.