Nigeria's path to green energy transition: Insights from business preferences for solar PV adoption

Nigeria has ramped up its efforts to shift from fossil fuels toward renewable energy sources. However, despite abundant solar resources, the adoption of solar photovoltaic (PV) systems among Nigerian Small and Medium-sized Enterprises (SMEs) remains constrained. This study aims to identify the factors influencing solar PV adoption and examines the role of targeted information in influencing preferences and Willingness to Pay (WTP). Data was collected from 412 SMEs and analyzed using a randomized conjoint experiment and randomized control trial. Among the evaluated attributes, reliability of power supply and total setup cost were the significant determinants for solar PV adoption. Manufacturing SMEs demonstrated stronger preferences for reliability and cost-saving attributes than service-oriented SMEs, underscoring the heterogeneity in sectoral priorities. The WTP analysis revealed that SMEs were willing to invest up to approximately 38% of their annual revenues to secure reliable and sustainable energy solutions. The information treatment increased the likelihood of solar PV adoption by 2% and WTP by 3.28%, highlighting the critical role of raising awareness. Furthermore, information treatment reduced the negative impact of higher setup costs and increased preferences for flexible financing models. These results provide actionable insights to design targeted strategies for facilitating Nigeria’s path to green energy transition.