Analysis of latent impeding factors to solar photovoltaic investments in Ghana

Abstract

Purpose Ghana has recently reviewed its renewable energy Act 835 with an objective of providing 10% of its energy from renewables by 2020 (Ackah and Asomani, 2015). Meanwhile, solar Photovoltaic (PV) accounts for less than 2% of the energy mix (Energy Commission, 2018). In combating environmental issues such as climate change and meeting these policy targets, there is the urgent need to increase investment into the renewable sector. Therefore, the purpose of this paper is to critically examine the impeding constraints to photovoltaic investment in Ghana. Design/methodology/approach The Literature evaluation was carried out of critical constraints surrounding PV investments. Questionnaire was developed and administered online using Google form. Descriptive statistics was used to describe the features of each constraint. In addition, inferential analysis using relative importance index was used to rank these indicators. Again, one sample t-test was used to test the significance of the indicator. Multiple indicators were used to measure the latent constructs. Finally, independent test of mean equity was used to test relationship between the working experiences of despondence who have worked with solar PV below five years and those who worked from five years to ten years. Findings The research has highlights high installation and maintenance costs, lack of access to long-term capital finance, access to affordable consumer finance and lack of support to research and development as the major investment obstacles to solar PV investment in Ghana. Research limitations/implications It is recommended that the Government of Ghana should provide incentives such as tax waivers, which will encourage entrepreneurs, invest into PV. In addition, it is recommended that solar PV companies must collaborate with financial institutions to provide low interest and flexible consumer financing schemed that can enable home users to purchase the technology. Future research should complement this work by focusing on the impact of domestic currency volatility on PV investment. The scope of this study is constrained to the PV industry in Ghana. Practical implications This study will serve as a guide to the private sector business owners to help make critical PV investment decisions. It has also brought to the forefront the reason why solar PV account for a small fraction of Ghana’s energy mix. Originality/value This paper seeks to espouse the prevailing constraints to PV investment in Ghana and seeks to contribute to already existing literature that will make profound changes in state policy around PV investment. By understanding these difficulties, driving pointers can be recognized to encourage effective future venture inside the sustainable power source area. In this way, the research leads to a better understanding of the impeding factors that hinders PV investment in Ghana. Again, the paper has achieved new discovery with regards to variations between years of experience with PV use. The variation being less than five years with over five years of PV use. By understanding these difficulties, driving pointers can be recognized to invigorate effective future ventures.