Policy Research Reports
Drivers of Renewable Energy Adoption in Egypt’s SMEs
No.
PRR 48
Publisher
ERF
Date
September, 2024
Topic
Q4. Energy
Q5. Environmental Economics
Summary
Increasing the adoption of renewable energy (RE) is essential to reduce greenhouse gases and combat climate change. Using a sample of small and medium enterprises (SMEs) and employing a quantile regression, this paper identifies the main drivers of RE adoption in the case of Egypt. Our findings reveal that firms owned by females are more likely to consider adopting RE. Furthermore, the larger the share of youth in a firm’s labor force, the higher the firm’s probability to deploy RE. Information and communication technology (ICT) utilization, awareness of RE, and access to information on backup generation technology all strongly influence the likelihood of firms considering RE adoption. These results have important policy implications.
In this context, removing the impediments facing women entrepreneurs should be a priority for policymakers in Egypt since they are more likely to deploy RE. Additionally, since youth are found to be important drivers of RE adoption, providing this group with the necessary skills through education would serve to enhance this role even more. Raising awareness of the benefits of RE is a straightforward means by which firms in Egypt can be encouraged to employ RE, while providing access to information about backup generation technology can reduce the risk stemming from the intermittency of RE and thus promote its adoption.
Research Fellows
Abeer Elshennawy
Professor of Economics, American University in Cairo
Authors
Mohammed Bouaddi
Associate Professor of Economics, American University in...