Energy Cost Pressure and Financial Accessibility as Determinants of Solar PV Adoption among SMEs in Akinyele LGA, Oyo State, Nigeria.

This study examined the economic and financial determinants of solar photovoltaic (PV) adoption among Small and Medium Enterprises (SMEs) in Akinyele Local Government Area of Oyo State, Nigeria. The study employed a quantitative research design using structured questionnaires administered to SME operators. Principal Component Analysis (PCA) was used to identify the major economic and financial factors influencing solar PV adoption. The results showed that the dataset was suitable for factor analysis with a Kaiser-Meyer-Olkin (KMO) value of 0.739 and a significant Bartlett’s Test of Sphericity (p < 0.05). The PCA extracted seven major components explaining 73.371% of the total variance. The identified determinants include energy cost pressure, access to finance and credit facilities, investment willingness, high upfront installation cost, digital financial technology, peer financial benchmarking, and financial institutional support. The findings revealed that rising electricity tariffs, unstable grid pricing, and increasing generator fuel costs strongly motivate SMEs to adopt solar PV systems, while high installation costs remain a major barrier to adoption. The study concludes that economic realities and financial accessibility significantly shape solar PV adoption among SMEs. The study recommends improved renewable energy financing schemes, flexible payment systems, and government support programs to enhance solar PV adoption among SMEs in Nigeria.

Renewable Energy Economics

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