Solar energy technology adoption and diffusion by micro, small, and medium enterprises: sustainable energy for climate change mitigation

This research intends to identify influential factors in adopting and diffusing solar energy technology (SET) by micro-, small-, and medium-sized enterprises (MSMEs) in two tehsils of Multan district in Pakistan’s Punjab province. To this end, the influential factors are identified through studying literature surveys and conducting questionnaires. Following that, partial least squares-based path modeling is employed. The results showed that (1) enterprises’ size, perceived SET’s ease of use, and perceived SET’s reliability are the top three driving factors. (2) The perceived SET’s price, perceived level of competition’s pressure, and MSME’s energy cost intensity are the barriers to the adoption and diffusion of SET, while the lack of technical knowledge about SET is a neutral factor. (3) Perceived SET’s price, MSMEs’ energy cost intensity, and enterprises’ size are among the most important factors based on the effect size and path coefficients, while the lack of technical knowledge about SET, preferences of MSMEs’ customers, and eco-labels and green stickers have lower importance. Since the adoption of SET is a rational decision that is concretely dependent on economic incentives, it is recommended to lower the price of SET to scale up the adoption and diffusion of SET by Pakistani MSMEs.