Drivers of Renewable Energy Use in Saudi Arabia: Evidence from Wavelet Local Multiple Correlation Approach

Abstract

This study examines the impact of various factors, including oil rents, government effectiveness, economic complexity, and economic growth, on the use of renewable energy in Saudi Arabia. Employing a novel time-localized wavelet multiple regression correlation framework, the unique approach followed reveals significant and positive interconnections between these factors and promotes renewable energy utilization in the long run. However, the aforementioned factors’ short-term correlations are substantially lower and insignificant for some time intervals. Importantly, the analysis performed shows that oil rents and government effectiveness play a dominant role among the other factors. These findings have crucial policy implications, highlighting the need for effective governance and the potential for diversifying energy sources in Saudi Arabia.