Title: Determinants of use of solar energy as alternative source of power by small and medium enterprises in Lagos state, Nigeria

Abstract

Small and Medium Enterprises (SMEs) in Lagos State (Lagos) suffer from frequent power outages from the national grid resulting in financial losses, and eventual shut down. The use of alternative sources of power to alleviate the impact of power outages by SMEs on their businesses is rampant. Extant literatures showed that solar energy is one of the alternative sources of energy used by SMEs to mitigate the effect of frequent power outages. Literature is sparse on the level of penetration/use of solar energy by SMEs, and the determinants of use of solar energy as an alternative source of power by SMEs. Therefore, this study was aimed at assessing the level of penetration/use of solar energy, and identify the determinants of use of solar energy by SMEs in Lagos. The research which was hinged on consumers’ theory, was a quantitative research using econometric techniques like descriptive statistics, perceptual maps, and binary logistic regression. Questionnaires were randomly distributed to six hundred SMEs in the urban, semi urban, and rural areas of Lagos. Data were presented in tables, graphs, and charts. The study showed 88% level of penetration, and a 77% level of use of solar energy by SMEs in Lagos. The perceptual maps of the study indicated that, the level of penetration/use of solar energy amongst SMEs in Lagos is high. Similarly, binary logistic regression showed that, general cost of power from the DisCos, and policy support for solar energy were more likely to be the determinants of use of solar energy as an alternative source of power by SMEs in Lagos. It was concluded that general cost of power from the DisCos, and policy support for solar energy were the determinants of use of solar energy as an alternative source of power by SMEs at the time of the research.