Renewable energy adoption in european small and medium-sized enterprises: A comparative sectoral analysis

• Industry and manufacturing SMEs lead in renewable energy adoption rates. • Internal financial resources are key drivers of renewable energy adoption in SMEs. • Public funding is underutilized by service-sector SMEs in renewable energy adoption. • Tailored, sector-specific policy support is crucial to boost SME renewable energy use. This study explores sectoral differences in renewable energy adoption among Small and Medium-Sized Enterprises (SMEs) in the European Union, with a particular focus on the understudied service sector, which has received considerably less attention than industrial and manufacturing activities. Drawing on data from the Flash Eurobarometer 498 on SMEs, Resource Efficiency, and Green Markets, the analysis examines how internal resources, especially financial capacity, and external support—such as public funding and advisory services—shapes renewable energy decisions. The findings reveal that industrial (48.7 %) and manufacturing (48.1 %) SMEs are significantly more likely to plan renewable energy adoption in the near future compared to service-sector SMEs (41.1 %). Internal financial resources emerge as a key driver across all sectors, while the effectiveness of external support varies. In particular, public funding is notably underutilized in the service sector, despite its strategic potential. These sectoral disparities reflect deeper differences in energy consumption patterns, investment priorities, and the perceived returns from renewable energy. The study highlights the need for tailored, sector-specific policy interventions to remove adoption barriers in the service sector and improve the alignment of financial and advisory mechanisms. By identifying the distinct challenges and enablers across sectors, this research contributes to the design of more effective renewable energy policies for SMEs, supporting a more inclusive and sustainable energy transition in line with broader Sustainable Development Goals.