Breaking down barriers: strategic approaches and prioritization for renewable energy adoption in MSMEs sector

Purpose The adoption of renewable energy sources (RES) into the Indian micro-, small- and medium-sized enterprises (MSMEs) sector opens up various avenues of advantages such as better energy security and lesser carbon emissions. However, despite the significant potential, numerous barriers limit RES adoption among MSMEs; therefore, research is needed regarding strategies to counter them. Design/methodology/approach This study reviews extensive literature to identify connected barriers affecting MSMEs, such as technological obstacles, market dynamics, infrastructure challenges, environmental concerns, technical limitations, socio-cultural factors, institutional barriers and financial constraints. In this study, these barriers have been prioritized using AHP and TOPSIS, indicating financial constraint as the most important, followed by environmental concerns. Additionally, the research employs interpretive structural modeling (ISM) alongside Matrix Impact Cross-Reference Multiplication Applied to a Classification (MICMAC) analysis to systematically classify the strategies according to their driving and dependency power, thereby offering an in-depth perspective of the MSME environment. Findings According to the TOPSIS results, financial constraints are ranked at the top, implying they are critical in adopting RES in MSMEs. The findings emphasize the need to offer financial incentives and create innovative financing mechanisms tailored specifically for the MSME sector to overcome these barriers. Research limitations/implications These insights can guide industry stakeholders and policymakers on how they could navigate the many complexities involved in adopting RES into the MSME that supports an energy future with sustainability. Originality/value The study uniquely addresses the barriers to adopting RES in MSME sectors and proposes a structural model for strategies to mitigate such barriers.