Effect Of Solar Energy Adoption On The Performance Of SME’s In Adamawa Northern Senatorial Zone (A Comparative Study)

Abstract

This study investigates the effect of solar energy adoption on the performance of Small and Medium Enterprises (SMEs), across the selected markets in the Adamawa Northern Senatorial Zone of Nigeria (A Comparative Studies). Using a mixed-methods approach, the research collected quantitative data from SME operators and analyzed it through spatial regression, ANOVA, and correlation techniques to assess performance impacts, influencing factors, and income outcomes. Findings reveal that the adoption of solar energy serves as a key differentiator for business success among SMEs in the Adamawa Northern Senatorial Zone. The main factor influencing SMEs' adoption of off-grid solar technology is financial constraint particularly the high cost of installation and limited access to financing followed by their specific energy consumption needs. Solar energy contributed to notable improvements in business performance, including increased productivity (38.9%) and reduced operational costs (26.7%), with adopters reporting an average income growth of 15–25% and energy cost savings of 20–30%. Statistical analysis confirms that the type of solar system, year of adoption, and business size are key predictors of performance improvement, while the correlation between solar adoption and business outcomes was especially strong among recent adopters (ρ = 0.88–0.92, p < 0.01). The study concludes that off-grid solar energy adoption significantly enhances the operational efficiency, financial sustainability, and income of SMEs, particularly when supported by targeted policies, accessible financing, and ongoing awareness campaigns. It recommends integrated policy frameworks, financial interventions, and continued monitoring to optimize solar adoption for broader economic development