ABSTRACT
This study assesses the prospects of green energy technologies (photovoltaic system) as an alternative source of energy in La Nkwantanang-Madina Municipality. The assessment revolves around analyzing the influence of socioeconomic, institutional and technical factors on the adoption of green energy technologies (photovoltaic system) as an alternative source of energy by micro and small businesses. The data are drawn from the administration of questionnaires and in-depth interviews with the aid of an interview guide in La Nkwantanang- Madina. Data consist of a survey of 197 micro and small businesses and five (5) in-depth interviews. The survey was conducted to ascertain the level of education of respondents, business background of respondents, knowledge of green energy technologies, willingness to pay for solar energy technologies and their adoption decision of solar energy technologies as an alternative source of energy. The idne-pth interviews were done to assess the existence and nature of policies and/or regulations on solar energy technologies and their influence on adoption in La Nkwantanang-Madina, the cost of solar energy technologies, the rate of demand, payment plans for consumers, and the efficiency of solar energy technologies and so on.
The data were analyzed in terms of the relationship between social, economic, institutional and technical factors and the adoption of solar energy technologies as an alternative source of energy by micro and small businesses. The findings show that the adoption of solar energy technologies is influenced by factors such as the level of education of respondents, business type of respondents, respondents’ perception about the efficiency of solar energy technologies and the cost of these technologies. The further assessment indicated that businesses are willing to incur some level of cost in the adoption of solar energy technologies. Taking advantage of the willingness of businesses to pay for solar energy technologies will require the government
and other stakeholders to initiate policies (e.g. subsidies) that will facilitate the adoption of these technologies. It was however found that people’s knowledge of these technologies, business value, monthly electricity expenditure of businesses the rate (cost) of electricity from the grid, institutional setup the existence of by-laws and gender of respondents are less likely to exert significant influence on the adoption decision of micro and small businesses in La Nkwantanang-Madina Municipality.
Based on the findings, the study therefore concludes that the prospects of solar energy technologies as an alternative source of energy is appreciable but for the adoption of these technologies to be significant there is the need for institutions and measures to address the factors that have significant influence on the adoption decisions of respondents in the La Nkwantanang-Madina Municipality.
CHAPTER ONE INTRODUCTION
BACKGROUND OF STUDY
The global community is faced with a reproving situation in the aspects of energy security, global temperature rise, and energy poverty are pressing, making the greening of the energy sector vitally important. The current challenges are worsened by the projected growth in the global energy demand, as population and incomes increases (Islam et al., 2014). Transitioning from brown energy to green energy plays an essential role complementary with the improvement of generation and transmission infrastructure in particular to increase energy efficiency (Mathews, 2013).
Africa is endowed with numerous resources for the production of energy but suffers a hiccup in the supply of energy. Making sustainable energy accessible is hypercritical to the progress of the region that made up of about 16% of the world’s population, but is able to meet only 4% of its energy demand (Kaygusuz, 2012). Since 2000, Africa has experienced a fast economic transition and energy usage has increased by 45% (Wolde-Rufael, 2006). Many governments are gearing up to deal with diversifying barriers that are militating against inflows of fiscal resources into local energy supply, but poverty in terms of energy infrastructure risks putting a halt on critically needed resources for the improvement of well-being, this situation varies across the continent of Africa (IEA, 2014).
The energy situation in Ghana is not different from most African countries that are naturally endowed with green energy resources. Ghana’s power sector has over the past decade, been plagued with power supply challenges resulting in a considerable impact on the economic
situation of the country. According to Mathrani et al (2013), the World Bank placed access to electricity as the next most essential constraint to economic activities in Ghana and estimated a loss of about 1.8 percent of GDP during the power crisis of 2007. Also, the Institute of Statistical, Social and Economic Research (ISSER) estimated a loss of about $2.1 million daily ($55.8 million monthly) in production value due to the power crisis “dumsor” the country was facing recently (ISSER, 2015). It is an indication that Ghana lost an estimated $680 million (2 percent of GDP) in 2014 due to the power crisis (Kumi, 2017).
Meanwhile, the amount of solar radiation Ghana receives is between 4.5–5.6 kWh/m2/day (UNEP, 2015). Interestingly, solar energy sources in Ghana haven’t played any major role in the generation mix, contributing only 0.2 percent to the generation mix in 2016 (Kumi, 2017). In 2016, the only renewable facility (solar photovoltaic plant) feeding directly into the national grid was the 2.5 MW solar photovoltaic plant owned by the Volta River Authority sited in Upper East Region (EADTF, 2014).
To ensure that green/renewable energy provides feasible alternatives to the power crises in Ghana, the Green/Renewable Energy Act was passed into law in 2011 to provide the legal and regulatory framework for the adoption of green/renewable energy sources to complement the other sources. Following the passage of the Green/Renewable Energy Act, the Energy Commission has formulated regulations for the sub-sector with the inclusion of the renewable energy grid code and together with the Public Utility Regulation Commission (PURC) developed feed-in tariffs for fiscal inflows into the green/renewable energy sector. The Act provides for the setup of a Green/Renewable Energy fund to provide fiscal assets for the improvement, expansion, efficient management and consumption of green energy resources. The fund also provides financial incentives for the development of small network and private renewable power technology for rural areas and isolated communities. Under the feed-in tariff scheme, the Public Utility Regulation Commission (PURC) is mandated to set the feed-in tariff
rates for the sector based on which developers could sign power purchase agreements with the distribution companies following a documented approval from the Public Utility Regulation Commission (Kumi, 2017).
Green/Renewable energy technologies (main hydropower with the other sources playing a limited role) constitute a huge proportion of Africa total power supply and there is potential for this to widen as numerous range of technologies is being developed. Many countries are working in the development of their possible green energy assets (Redcliff, 2002). For instance, Sweden has taken a step in the development of its green/renewable energy sector through the provision of a wide range of incentives to consumers in the automobile market and Germany is also going in that trajectory (Power and Zulauf, 2011). Green energy has the capacity to aid in transitioning from energy insecurity to energy sufficiency by reducing dependence on brown energy sources (fossil fuels) and assist to vary the energy generation composition (Kaygusuz, 2012).
STATEMENT OF THE PROBLEM
Electricity is an essential factor in influencing economic growth and development in any given economy or country. Electricity is important in the performance of the day to day activities of businesses, powering machines in the industrial sector, heating and lightening of households (Oyedepo, 2012). Electricity is also essential for the advancement of the healthcare system, human capital development, the mobility of people and goods, effective socialization through communication, exploration of mineral wealth by countries and so on. This emphasizes how crucial and indispensable electricity is for human existence in the 21st century (Kumi, 2017).
Sub-Saharan African businesses most frequently cite unreliable and unsustainable electricity supply as a significant constraint on their effective operation. Insufficient and outdated power generation and supply infrastructure have a huge implication on the efficiency of businesses in Africa (Escribano et al., 2010). On average, there is an estimated potential annual revenue loss of 4.9% as a result of erratic electricity power outages in Africa whilst Central Africa and Nigeria are reported as the countries experiencing very high losses. In South Africa, it is lower compared to the other countries (World Bank, 2014).
According to Attigah and Mayer-Tasch (2013) to have reliable access to electricity in economies with power supply problems, businesses in these countries invest in diesel/petrol powered generators as an alternative electricity source. Foster and Steinbuks (2008, 2010) estimated that investment in diesel/petrol powered generators as an alternative electricity by businesses accounts for 6% of total installed electricity generation capacity in sub-Saharan Africa and 20% in Nigeria and the generation of electricity through petrol/diesel powered generator is thrice the cost of the electricity from the national grid. Malik and Baptist (2006) assert that unreliable access to electricity is now part of the fabric of several businesses in
Nigeria and investment in diesel/petrol powered generators is seen as an alternative electricity source.
The role green energy technologies (photovoltaic system) can play in achieving electricity self- sufficiency or as an alternative energy source cannot be undervalued. The introduction of the Green/Renewable Energy Act in Ghana has provided a stimulus for the advancement of the sector. However, the government needs to strengthen the enforcement of the Act and the various sub-regulations as well as introducing more inducement to capture investments in the renewable energy space (Kumi, 2017).
Though there have been reliable energy production and supply in the country for the past two years, businesses and households are still in doubt as to whether this can continue for a very long time. This is because energy generation and supply have not been reliable for several years which always hit businesses hard resulting in shutdowns and laying-off of employees and also, investment in alternative energy sources (Cobbinah and Adams, 2018). Businesses in Ghana also invest in diesel/petrol powered generators to serve as backup electricity in the event of erratic electricity outages.
