Barriers and Enablers to Financing Decentralized Solar Energy Systems in Southeast Asia

Abstract: A global transition to renewable energy is required to address the sustainability challenge and mitigate the socio-ecological consequences of climate change. This thesis explores what factors contribute to slowing down the transition to renewable energy in Southeast Asia. The region was chosen due to its rising energy demand, high energy poverty rates and unsustainable energy generation. The objective is to identify what barriers and enablers inhibit and encourage the financing of decentralized solar energy systems (DSES) in the region.  The study applied a qualitative approach where five exploratory and 12 semi-structured interviews were conducted to gain rich and diverse insights into the current state of DSES within Southeast Asia. The PESTLE analytical framework was used to code the results in a systematic way. This study found several barriers inhibiting an increased deployment of DSES. These included ineffective regulatory frameworks, systemic corruption and market monopolization of DSES, financial issues related to the small size of projects as well as technical and financial capacity among local actors. At the same time, the study identified multiple enablers to address these challenges, including policies encouraging transparency and standardization, capacity building for maintenance or financial literacy and falling project costs due to technological innovation.