In short: Saudi Energy's new tariff starts on 1 January 2027. Commercial rates rise from 22 to 25 halalas per kWh (up to 6,000 kWh a month) and from 32 to 35 above that, roughly 14% and 9%, with a new fixed monthly charge on top. A business paying SAR 100,000 a year in electricity should plan for roughly SAR 9,000 to 14,000 more. Cutting consumption by about 15% more than cancels the increase. For how an SEC bill is built, see our commercial electricity tariffs guide.
On 25 October 2026, Saudi Energy (formerly the Saudi Electricity Company) announced revised electricity tariffs that take effect on 1 January 2027. For commercial customers, the rate for the first 6,000 kWh each month rises from 22 to 25 halalas per kWh, and the rate above 6,000 kWh rises from 32 to 35. Power used before 1 January is still billed at the current rates, which leaves a short window to act. This guide explains what changes, what it means for a business bill, and how to offset it.
This is the second rise in about eighteen months. After the June 2025 increase (20 to 22 halalas, and 30 to 32 above 6,000 kWh), the 2027 tariff means the first band will cost 25% more than it did before mid-2025, and the second band about 17% more.
What the 2027 tariff changes
Commercial, private health and private education. 25 halalas per kWh up to 6,000 kWh a month (from 22, about 14% more) and 35 halalas above 6,000 kWh (from 32, about 9% more).
Industrial. 23 halalas per kWh, about 15% more than today.
A fixed monthly charge. A new charge based on the size of the circuit breaker replaces the old meter-related fees. The amounts are set out in Saudi Energy's published tariff table, so check the figure for your own breaker size.
Timing and VAT. Consumption from 1 January 2027 is billed at the new rates and earlier consumption at the old ones, so a bill that spans the turn of the year can show both. VAT is added on top as before. The percentages above are calculated from the previous commercial rates of 22 and 32 halalas; always confirm against your own bill. The official announcement is on the Saudi Energy website.
What it means for a commercial bill
Per kWh the increase looks small. Over a year it is not. A site paying SAR 100,000 a year at today's rates would pay roughly SAR 9,000 to 14,000 more at the new rates for the same consumption, depending on how that consumption splits between the two bands, before the fixed charge and VAT.
Two things follow. The rate and the fixed charge are set by the tariff, so consumption is the one part of the bill a business can change. And every kWh saved is now worth more: in the first band, 10,000 kWh of avoided waste is worth SAR 2,500 a month before VAT, up from SAR 2,200.
A 15% saving more than cancels the increase
A bill that rises by 14% and then falls by 15% ends about 3% below where it started. If the rise is 9%, it ends about 7% below. Savings of that size are what monitored sites achieve in practice. Kudu, a Saudi restaurant chain, is achieving 15 to 20% average savings across its monitored branches. Transmed saved 9.34% by making chiller and compressor consumption visible, Tex Plastics identified more than 26% in savings with a 3-month payback, and Nova Waters reached a 1.8-year payback on its monitoring investment.
Where the waste usually is
In the sites IOTech monitors, the same few things appear again and again: HVAC and refrigeration running overnight or on closed days, cooling set to a fixed schedule instead of actual occupancy, chillers and compressors cycling inefficiently, and a single faulty asset drawing far more than its share. None of it shows on a monthly bill. Our guide to energy cost reduction in Saudi Arabia walks through the full sequence, and CO2 and occupancy monitoring explains how to match HVAC to how a space is really used.
What to do before 1 January
This week: read your bills. Pull your last three SEC bills and note monthly kWh, the tier you fall in and any fixed fees. A site using less than 6,000 kWh a month sits entirely in the 25-halala band; larger sites also fall into the 35-halala band, so check how your bill applies it.
In November: find your baseline. Measure what each building draws when nobody is there, at night and on Fridays. An energy audit gives a first picture of where the electricity goes before any money is spent.
Put monitoring on the biggest loads. Real-time energy management shows consumption by circuit or machine as it happens, so waste is found in days rather than discovered on next month's invoice.
In December: fix and verify. Fix the top items, check the drop against the baseline, and set your 2027 energy budget on the new rates rather than the old ones.
How IOTech can help
IOTech provides IoT energy management for Saudi businesses: monitoring of electricity, gas, water, temperature, humidity, CO2 and occupancy, with alerts, per-circuit data and reporting that shows savings against a baseline, for single buildings and multi-site portfolios.
The fastest way to start is IOTech's Energy Waste Assessment, a free 30-minute review built from one recent SEC bill. You receive a written, costed estimate of where your site is likely losing money, with no charge and no obligation. Send us one recent bill before 1 January and we will show where the new tariff hurts most. Contact our team to book it.
Frequently Asked Questions
When does the new Saudi electricity tariff start? The revised tariff, announced on 25 October 2026, applies to consumption from 1 January 2027. Consumption before that date is billed at the current rates.
What are the new commercial electricity rates in Saudi Arabia from 2027? 25 halalas per kWh up to 6,000 kWh a month and 35 halalas above 6,000 kWh, up from 22 and 32. Industrial customers pay 23 halalas per kWh. A new fixed monthly charge based on breaker size also applies.
How much will the 2027 tariff increase raise a commercial electricity bill? Commercial rates rise by about 9% to 14%, so a site with unchanged consumption should expect roughly that increase before the fixed charge and VAT.
How can a business offset the 2027 electricity tariff increase? By reducing consumption. Find out what buildings use when empty, monitor the largest loads in real time, and fix the waste. A 15% cut in consumption more than cancels a 9% to 14% rise in rates, and IOTech's free Energy Waste Assessment is the quickest way to find where to start.
