Effect of renewable energy development on sustainable development of small and medium enterprises potentials in Nigeria

Abstract

The effect of renewable energy (RE) development on the sustainable development of SMEs' potential in Nigeria was empirically done to unlock the possibility of deciphering the perennial energy problem in Nigeria. The development of renewable energy (RE) resources and utilization can greatly benefit Small and Medium Enterprises (SMEs) in Nigeria by providing a reliable, sustainable and cost-effective power supply. This is especially important, as many sectors of Nigeria's economy, including SMEs, are highly dependent on the poor power supply that is currently available. Thus, this study specifically examines the effect of RE resources availability, generation, system efficiency and effectiveness, and utilization on SMEs’ sustainable development potential in Nigeria. A survey research design was adopted and a population of 73,081 SMEs across Nigeria was utilized with a sample of 398 SMEs selected using multi-stage sampling techniques. A validated questionnaire was administered to the owners/managers of the selected SMEs, information obtained from the questionnaire was collated, scrutinized, and analyzed using Structural Equation Model (SEM) with the aid of SMART PLS 4 software through the structural model. The findings revealed that RE resources availability, generation, system efficiency and effectiveness, and utilization potentials of SMEs have a positive and significant effect on the potential development of SMEs in Nigeria. The study concluded that RE resources availability, generation, system efficiency and effectiveness, and utilization have significant influence on SMEs’ sustainable development potential in Nigeria. Thus, government, private sectors, and international development partners should focus on providing more resources, knowledge, and support to enable SMEs to access, generate and effectively use renewable energy resources more efficiently.