Dominant factors for solar energy choice by Manufacturing Micro, Small and Medium Enterprises (MSMEs’) in Tanzania

Abstract

Energy demand by manufacturing industries has increased significantly whereby fossil fuels consumption is dominant. Increased concern over resource depletion, and environmental impacts, suggests future dependence on renewable energies. Tanzania is blessed with abundant solar energy and its exploitation may contribute to increased energy access. Despite the paybacks of renewable energy, studies on the exploration of the dominant factors for energy choice by manufacturing MSME’s are scarce. This study explored the dominant factors for solar energy choice by manufacturing MSME’s. Questionnaires were used to collect data (n = 236) from employees in manufacturing MSMEs’ whereby descriptive and multinomial probit (MNP) model were employed to establish the dominant factors. The findings of MNP revealed that not expensive energy, and other factors (e.g., availability of solar appliances) have significant influence on solar PV use, while the adoption of hydro-electricity was significantly influenced by not expensive and advised to use energy. Easy access, and not expensive have significant influence on fossil fuels. The Confirmatory Factor Analysis (CFA) results revealed that all factors (i.e., environmental, social, and economic) have significant influence on workers perception of sustainable manufacturing. These findings provide critical information for policy making instruments in Tanzania for informed decisions in the formulation of policies in the utilization of renewable energy technologies.