Assessing Renewable Energy Adoption Barriers Among Small andMedium Enterprises (SMEs) in Emerging Economies

Abstract

This study examined the barriers influencing renewable energy (RE) adoption among Small and
Medium Enterprises (SMEs) in emerging economies. The study employed a descriptive survey
research design using a structured questionnaire titled Renewable Energy Adoption Barriers
Questionnaire (REABQ) administered to 420 SMEs selected through stratified random sampling. Out
of 420 distributed questionnaires, 398 were duly completed and returned, representing a 94.76%
response rate. Data were analyzed using descriptive statistics for the research questions and chisquare tests for the hypotheses. Findings revealed that financial constraints, limited technical
knowledge, and institutional challenges were significant barriers to renewable energy adoption.
Descriptive statistics showed high levels of agreement on issues related to high upfront costs,
inadequate financing schemes, lack of skilled personnel, and unreliable government policy support.
Hypotheses testing confirmed significant relationships between financial barriers, technical expertise,
institutional frameworks and the level of renewable energy adoption among SMEs. The study
concluded that although SMEs recognize the benefits of renewable energy, various structural and
operational barriers impede adoption. The study recommends that governments enhance policy
stability, financial institutions develop SME-friendly renewable energy credit schemes, and SMEs
increase staff training on renewable technologies. Collaboration between private RE providers and
SME associations is also recommended to reduce knowledge gaps and enhance awareness. The study
contributes valuable insights for policymakers, development agencies, and SME support
organizations seeking to promote sustainable energy transitions in emerging economies.