The Impact of Using Alternative Energy on Cost Management and the Competitive Advantage of Companies: A Field Study in the Kingdom of Saudi Arabia

Abstract

This study aims to investigate the impact of transitioning toward renewable energy sources on restructuring the costs of industrial facilities and enhancing their competitive advantage. It highlights the role of strategic cost management in improving comprehensive environmental performance, aligned with the strategic goals of Saudi Vision 2030 and its green economy initiatives. The study used the descriptive-analytical approach due to its suitability for the research nature, analyzing modern accounting concepts and linking them to practical realities. The study population and sample consisted of employees and managers in financial, production, and top management departments within companies operating in Saudi Arabia. A simple random sample of (80) valid and complete questionnaires was drawn for statistical analysis. The study reached several results, most notably: Relying on clean energy fundamentally reduces operational expenses and protects companies from fossil fuel price fluctuations, providing liquidity that supports financial stability. The results proved the limitations of traditional cost systems, necessitating the adoption of advanced accounting tools like Target Costing and Option-Based Costing to manage uncertainty and identify unused capacities. Furthermore, investing in energy efficiency creates a green differentiation that grants the facility a sustainable competitive advantage. The study recommended the urgent need for companies to update their accounting systems to precisely measure environmental costs. It also recommended adopting proactive strategies to eliminate pollutants at the source, and aligning corporate operations with Environmental, Social, and Governance (ESG) standards to enhance institutional reputation and attract green financing.