Abstract

Access to clean, affordable and reliable energy is a major developmental challenge in Africa. The present study investigates the determinants and impact of adopting solar energy on Micro, Small & Medium Enterprises (MSMEs) market performance in Lagos, Kano and Ondo states in Nigeria using survey data from 700 MSMEs. We estimated the average treatment effect on the treated (ATT) and average treatment effect (ATE) of adopting solar energy on MSMEs' income. The findings indicate that adoption of solar energy is associated with an increment in MSMEs' monthly earnings by 27% (nearest neighbor matching), 24% (Kernel matching) and 23% (radius matching). The study points out that powering MSMEs through solar energy decreases their energy expenditure. By adopting solar energy, MSMEs using the national grid and standby generators can cut down their average monthly energy expenditure by 36.64%. MSMEs' decision to adopt solar energy is influenced by trade-offs between the possible production, economic and environmental effects as well as business owners, business, and product characteristics. To the extent that governments, non -governmental organizations and policymakers are committed to providing reliable, cheaper and cleaner energy systems, they must raise broader awareness of the potential benefits of adopting solar energy.

Keywords

Monthly earnings; MSME; Impact evaluation; PSM; Solar energy; Nigeria

Published in

Energy Policy
2024, Volume: 188, article number: 114063
Publisher: ELSEVIER SCI LTD

SLU Authors

• Owusu Sekyere, Enoch

  • Department of Economics, Swedish University of Agricultural Sciences
    
  • University of Pretoria
  • University of the Free State

UKÄ Subject classification

Energy Systems
Economics


Publication identifier

DOI: https://doi.org/10.1016/j.enpol.2024.114063

Permanent link to this page (URI)

https://res.slu.se/id/publ/130142