A Review of Barriers and Opportunities for Renewable Energy Adoption by SMEs in Ghana

Electricity is an essential aspect of the operations of Small and Medium-Scale Enterprises (SME) in various sectors of the economy including agriculture, industry and services. Access to a reliable and affordable supply of power is essential for their operations to remain competitive. SMEs in Ghana rely primarily on conventional power from the national grid. In recent times, conventional power supply in Ghana has been plagued by challenges primarily erratic power supply and high end-user tariffs, which have adverse impacts on SMEs’ productivity. End-user tariffs for SMEs are often higher than tariffs for residential consumers resulting in increased production costs which reduces their profitability, hence, long-term resilience and sustainability.

To mitigate the impact of these power challenges, some SMEs turn to self-generating options such as fuel-powered generators. However, this option is associated with an increased cost of operation and its attendant negative environmental impacts. Better alternatives that mitigate the challenge of the unreliability of power supply and high cost of power are essential for SME productivity. Solar and other forms of renewable energy technologies have not only proven to be stable, and economical in the long term, but also contribute to environmental sustainability.

Nonetheless, the rate of renewable energy adoption in Ghana among SMEs has been moderately low. As part of a broader objective of enhancing access to affordable renewable energy, this report highlights the results of a survey aimed at examining the opportunities, motivating factors and challenges to renewable energy adoption among SMEs. Participants in the survey were relevant stakeholders such as SMEs, suppliers of renewable energy technologies, government and regulatory institutions, and financial institutions.

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The Africa Centre for Energy Policy (ACEP) was established in 2010 to contribute to development of alternative and innovative policy interventions through high-quality research, analysis and advocacy in the energy and extractives sector in Africa.

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