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This book chapter investigates the profitability of alternative sources of energy and the feasibility of migrating to renewable energy sources and green technology among hospitality and tourism-based SMMEs in the King Sabata Dalindyebo (KSD) municipality in Eastern Cape Province, South Africa. A cross-sectional study was conducted among 100 accommodation-rendering enterprises (bread and breakfast) in the KSD Municipality using a structured questionnaire. We employ gross profit analysis to measure the average profit/loss incurred by the B&Bs in relation to the energy consumed. The analysis shows all the categories of the B&B recorded profit. All the categories were subjected to business viability decision tests such as cost-benefit analysis, the internal rate of returns (IRR), and net present value (NPV). Cost-benefit analysis (CBA) results revealed that only the solar/photovoltaic (PV) system option satisfied the economic viability of all three CBA decision criteria. Both discount rates of 6.5% and 10% proved that the solar system was a viable investment option for all B&B categories in the long term, but not in the short term, because of the sunk cost of installation. The study recommends the establishment of financial subsidies and environmental benefits incentives to influence small, medium, and microenterprises (SMMEs) to adopt renewable energy (PV) sources.

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Profitability, Energy Choice, and Consumption Pattern Among SMEs: A Case of Transitioning to Renewable Energy in the Rural Communities of South Africa

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  • 发表日期：

    2026年

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  • Vikela Liso Sithole,
  • Yiseyon Sunday Hosu

摘要

This book chapter investigates the profitability of alternative sources of energy and the feasibility of migrating to renewable energy sources and green technology among hospitality and tourism-based SMMEs in the King Sabata Dalindyebo (KSD) municipality in Eastern Cape Province, South Africa. A cross-sectional study was conducted among 100 accommodation-rendering enterprises (bread and breakfast) in the KSD Municipality using a structured questionnaire. We employ gross profit analysis to measure the average profit/loss incurred by the B&Bs in relation to the energy consumed. The analysis shows all the categories of the B&B recorded profit. All the categories were subjected to business viability decision tests such as cost-benefit analysis, the internal rate of returns (IRR), and net present value (NPV). Cost-benefit analysis (CBA) results revealed that only the solar/photovoltaic (PV) system option satisfied the economic viability of all three CBA decision criteria. Both discount rates of 6.5% and 10% proved that the solar system was a viable investment option for all B&B categories in the long term, but not in the short term, because of the sunk cost of installation. The study recommends the establishment of financial subsidies and environmental benefits incentives to influence small, medium, and microenterprises (SMMEs) to adopt renewable energy (PV) sources.