A qualitative study on how Manufacturing SMEs perceive the adoption of Solar Power Energy

Assessment 

Introduction

Background of the study

In the global move toward sustainable and long-term cost saving solutions Solar power has become as an essential solution. In Sri Lanka, climate change and environmental pollution caused by fossil fuel use have become serious challenges, making it urgent to make the shift to renewable energy resources (IESL, 2024). In Sri Lanka, manufacturing SMEs are facing high electricity costs and frequent power disruptions, making solar power the best alternative solution. The country’s reliance on imported fossil fuels has influenced industries to increase operational costs with the global energy crisis by highlighting the potential of transition for renewable energy (UNIDO, 2024). Despite potential benefits, the adoption of solar power energy remains low among SMEs in Sri Lanka. This study aims to explore challenges and opportunities of adopting solar power energy by manufacturing SMEs in Western Province, Sri Lanka, provides support for long-term sustainability while making economic growth.

Overview of Solar Power Energy and Global trend

Solar power emerged as an important element in the global transition to sustainable and renewable energy. The widespread adoption and sustainable use of renewable energy sources, including solar power, encourage the expectation of sustainable development, energy security, and low-carbon economic growth. Many countries have integrated solar energy into their national plans to reduce carbon emissions while ensuring energy independence (IRENA, 2024, p.45). In addition, solar energy is reaching net zero emissions by 2050. For that, it is underscored by new research highlighting solar energy and its potential to reduce emissions in several sectors, including the transportation industry and residential energy use (Rahdan et al., 2024 p. 2).

The global solar energy sector has experienced rapid expansion influenced by technological advancements and supportive policies. Global solar PV capacity surpassed 1,200 GW in 2023, according to a report by the International Renewable Energy Agency, underscoring the sector's growth (IRENA, 2024, p. 29). This growth has been facilitated by advancements in storage technologies, improved grid integration capabilities, and declining prices for solar PV modules (IAE, 2023, p. 112). However, despite these improvements, there are challenges such as high initial cost, policy inconsistency, and climate issues adopting solar power energy systems in different countries. (IRENA, 2024, P.38)

Status of the Solar energy adoption in Sri Lanka

Sri Lanka, as a tropical Island with abundant year-round sunlight, has significant potential for solar power utilization and increasing use of sustainable solutions (Sri Lanka Solar Panel Manufacturing). The country has made considerable effort to enhance the renewable energy sector, focusing on improving the share of the energy mix (IRENA, 2024). The Sri Lankan Sustainable Energy Authority (SLSEA) has launched policies encouraging solar energy adoption, such as the 2 “Battle for Solar Energy” initiative, aiming to install solar panels on both residential and industrial rooftops (Ministry of Power and Energy, 2024)

The role of the independent power producer (IPP) solar is also growing in Sri Lanka by enabling companies to generate and sell electricity through large scale grid connected solar projects. At the same time rooftop solar is also growing, providing gain to the households and commercial sector offering decentralized solutions for power needs (Renewable generation report, 2024) (Appendix I).

However, Sri Lanka's energy sector faces several challenges including high dependency on fossil fuel, increasing electricity costs and frequent power shortages. Sri Lanka has some of the highest electricity costs among South Asian countries, increasing the financial burden on businesses (Public Finance.lk, n.d.).

Role of SMEs in Sri Lanka’s Economy

Small and Medium Enterprises (SMEs) are recognized as key contributors to sustainable economic growth in both developed and developing countries in the age of economic globalization (Permatasari, & Gunawan, 2021 P.2). Similar to most developing countries, SME sector of Sri Lanka plays a significant role in the economy by contributing GDP, reducing unemployment, mobilizing domestic savings, diminishing poverty, boosting export revenues, and dispersing income (Upulwehera et al., 2021, P.52). In Sri Lanka’s economy, SMEs contribute to the National GDP around 52% and 45% to the total employment in Sri Lanka (National Policy Framework (SME), 2017, P.3). Further, it has been recognized as SME by the people engaged in the business. (Appendix II).

We focused this study on the Western province, which is the province of the capital city located in Sri Lanka, identified as the economic hub of the country and it is contributing 43.7% to the nominal GDP (Central Bank of Sri Lanka, 2024). Also, 54% of the SMEs are in the Western province in Sri Lanka (Economic Census 2013/2014) It has significant numbers of manufacturing SMEs established in the Western province in various industries, such as textiles, food processing, and machinery contributing 48.7% to the GDP (Appendix III).

Assessment Brief Solar Power Adoption by Manufacturing SMEs

Assessment Type: Research study / academic report (qualitative/secondary-data study)
Purpose: Investigate challenges and opportunities for manufacturing SMEs in Western Province, Sri Lanka to adopt solar power and produce evidence-based recommendations to support long-term sustainability and cost reduction.

Core requirements & key pointers to cover:

• Introduction & background context (Sri Lanka energy landscape, SME role), research aim, objectives, research questions, justification and scope.
• Overview / Literature Review global & national solar trends, technology, policy drivers (SLSEA, IPP, rooftop vs grid), barriers (cost, policy inconsistency, climate), and prior studies on SMEs and renewable uptake.
• Research Design & Methodology approach (secondary-data / qualitative synthesis), data sources (peer-reviewed literature, industry reports, government publications, case studies), inclusion criteria, and analysis technique.
• Findings / Results synthesis of evidence on benefits (cost savings, resilience), common barriers for SMEs (capital cost, information gaps, regulatory uncertainty), and identified best practices/initiatives.
• Discussion interpret findings relative to theory and Sri Lanka’s context; highlight tensions, success factors, and applicability for manufacturing SMEs.
• Conclusions & Recommendations answer research questions, practical implications (financing models, policy suggestions, capacity-building strategies), limitations and avenues for future research.
• Referencing & Appendices consistent citation (Harvard/APA), appendices with datasets, policy extracts, or supplementary tables (e.g., regional SME stats).
• Professional presentation clear structure, proofread language, cover page, abstract (150–300 words), and word-count indicators.

How the Academic Mentor Guided the Student Step-by-Step

1. Clarify scope & refine research aim

   • Mentor ensured the research aim was specific (manufacturing SMEs in Western Province) and framed practical objectives (challenges, opportunities, best practices).
   • Helped craft focused research questions to drive literature search and analysis.

2. Plan the literature review & gather sources

   • Advised on high-quality sources (IRENA, UNIDO, national policy docs, peer-reviewed journals, industry reports) and on documenting searches.
   • Taught synthesis techniqueshow to compare international trends with Sri Lanka’s status and extract SME-specific evidence.

3. Design the methodology

   • Recommended a secondary-data, qualitative synthesis approach given scope and available data.
   • Helped the student define inclusion/exclusion criteria for sources and a simple coding/template for extracting themes (barriers, enablers, outcomes).

4. Draft findings clearly and objectively

   • Guided structuring of the Findings section so each theme (cost, policy, technology, finance, socio-technical barriers) had evidence and concise examples.
   • Advised on use of tables/figures to summarise statistics (e.g., solar capacity growth, SME energy cost impacts) and to improve readability.

5. Link evidence to discussion and recommendations

   • Coached the student to move from description to critical analysis weighing tradeoffs, contextual constraints, and transferability of best practices.
   • Helped formulate actionable recommendations (finance options, policy alignment, capacity building, IPP/rooftop strategies).

6. Finalize presentation & academic quality checks

   • Reviewed draft for logical flow, clarity of argument, and alignment with research aim.
   • Checked referencing consistency, academic tone, abstract, and ensured appendices/supporting evidence were complete.

Outcome What Was Achieved

• Completed, coherent research report covering background, global and national trends, SME context in the Western Province, methodology, synthesized findings, critical discussion, and evidence-based recommendations.
• Key findings included: high potential for rooftop and distributed solar in Western Province; primary barriers were high up-front capital costs, inconsistent policy/incentive clarity, limited SME technical capacity, and financing constraints; enablers included falling PV costs, emerging IPP/rooftop programs, and targeted policy incentives.
• Recommendations produced for SMEs, industry bodies, and policymakers: targeted financing (grants, leasing, PPA models), information and capacity-building programs, streamlined permitting and incentives, and pilot programs to demonstrate ROI for manufacturers.
• Professional presentation with an executive abstract, clear structure, accurate citations, and appendices (regional stats, policy excerpts).

Learning Objectives Covered

1. Research & Evidence Synthesis: Demonstrated ability to locate, appraise, and synthesise diverse secondary sources into coherent findings relevant to a specific sector and region.
2. Contextual Analysis: Applied global energy/solar trends to Sri Lanka’s socio-economic and policy context, showing how international lessons can be adapted locally.
3. Critical Thinking & Problem Solving: Interpreted tradeoffs and constraints, and developed pragmatic recommendations that balance technical feasibility, finance, and policy.
4. Academic Communication: Produced a professionally structured report with clear argumentation, accurate referencing, and effective visual summaries.
5. Stakeholder-Focused Insights: Framed recommendations for multiple actors (SMEs, financiers, policymakers), demonstrating capacity to translate research into actionable strategy.

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