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Impact of solar energy subscription on the market performance of micro, small & medium enterprises in Nigeria

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  • Owusu-Sekyere, Enoch
  • Cissé, Fatoumata Nankoto
  • Achandi, Esther Leah

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.

Suggested Citation

  • Owusu-Sekyere, Enoch & Cissé, Fatoumata Nankoto & Achandi, Esther Leah, 2024. "Impact of solar energy subscription on the market performance of micro, small & medium enterprises in Nigeria," Energy Policy, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:enepol:v:188:y:2024:i:c:s0301421524000831
    DOI: 10.1016/j.enpol.2024.114063
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    Keywords

    Monthly earnings; MSME; Impact evaluation; PSM; Solar energy; Nigeria;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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