Investments in renewable energy: Opportunities for small and medium-sized enterprises through alternative financial instruments

Abstract

This study was devoted to identifying the possibilities of alternative financial instruments for the development of solar energy in the segment of small and medium-sized enterprises. The methodology included a comparative analysis of the efficiency of solar panels, an assessment of the availability of financial instruments for small and medium-sized enterprises, and the definition of key criteria for their selection. The study found that crowdfunding, green bonds, venture financing, and leasing were the most promising tools for small and medium-sized enterprises, allowing them to raise funds without collateral and with minimal financial history requirements. The average success rate of crowdfunding campaigns in the solar energy sector was 72%. It was revealed that the introduction of solar panels reduced the energy consumption of enterprises by 35-45% and had a payback period of 3-5 years, depending on the scale of the project and the financing model. The optimal financing structure included 30-40% of the company’s own funds, 20-30% of funds raised through crowdfunding, and 30-40% of equipment leasing or venture capital. The key factors of the economic efficiency of solar energy projects were the level of solar radiation in the region, the cost of connecting to the electric grid, the availability of government incentives and the quality of equipment. It was found that financial barriers could be overcome through combined financing models. With government guarantees, the investment attractiveness of projects increased by 40%. Long-term energy supply contracts increased the chances of obtaining financing by 25%. The results obtained deepened the understanding of the mechanisms of sustainable financing of solar energy for small and mediumsized enterprises and could be used in the development of government programmes to support enterprises in the field of renewable energy. The study contributes to the development of green finance and the transition to a low-carbon economy in the Kyrgyz Republic.