Macroeconomic Determinants of Renewable Energy Consumption in Saudi Arabia: A Hybrid Econometric-Machine Learning Investigation

This paper investigates the macroeconomic determinants of renewable energy consumption in Saudi Arabia during 1990–2025 using a hybrid approach of ARDL bounds testing and Random Forest machine learning with SHAP (SHapley Additive ExPlanations) to improve model interpretability. We employ annual data from the World Development Indicators to examine the effect of high-technology exports, trade openness, foreign direct investment, inflation and GDP on renewable energy consumption. Our results indicate that renewable energy consumption is highly path dependent, with previous adoption playing a significant role in current consumption (β = 0.776, p < 0.01). Trade openness also shows a negative contemporaneous effect ( = 0.0013, p 0.05) in line with the carbon lock-in hypothesis that typifies hydrocarbon-dependent economies. High-technology exports as a proxy for technological innovation do not appear to be a significant driver, indicating that the innovation-led energy transition in Saudi Arabia is still maturing. The Random Forest model confirms the importance of persistence effects explaining about 73 % of the variance. The analysis of the different time periods indicates that, after 2016 (also known as Vision 2030), there has been a significant change in the structure of the analyzed data, with the statistical model of research becoming much stronger as its explanatory power has reached up to 83%. The analysis of the SHAP allows understanding of the obtained results by measuring the influence of each individual variable. The findings that were obtained pertain to Sustainable Development Goal 7 (which focuses on developing cheap and clean energy), Sustainable Development Goal 9 (which focuses on industry, innovation, and infrastructure), and Sustainable Development Goal 13 (which focuses on climate action). It is our proposal that Saudi Arabia adopt focused innovation strategies, careful management of its trade integration, and a commitment to the institutional framework in order to accelerate the transition to renewable energy. However, it is important to note that this recommendation is suggestive and not definitive.