Stumbling blocks for solar social enterprises: Unveiling the barriers facing enterprises serving the base of the pyramid solar market in Tanzania

Abstract

Despite the initially favourable environment for solar PV investments, the relevant literature increasingly emphasizes the emerging barriers that threaten the growth and sustainability of solar PV enterprises. This has led scholars to examine challenges in East Africa's solar energy subsector, with a focus on the evolving institutional environment. However, we discovered that, within the ongoing discourse surrounding this sector, relatively limited scholarly attention has been given to solar energy service social enterprises (SEs). In response to this gap, we have conducted a specific study to explore the barriers facing the performance of solar energy service SEs in Tanzania. Drawing on institutional theory, we unveil the formative, normative and cognitive factors that influence the performance of SEs. Data were gathered through semi-structured interviews with ten solar SEs in Tanzania, supplemented by a review of the literature. The study revealed that regulatory barriers such as an unfavourable policy environment, grid arrival regulations, uncertainties over tariff policies, the prevalence of counterfeit products and limited access to finance and capital, as well as normative constraints such as limited partnerships and networking, are key barriers to operating at the base of the pyramid (BoP). The study underscores the need for collaborative efforts between the government, investors and SEs to create an enabling environment to continue serving the BoP market.