Renewable Energy Transition and Microgrid Adoption in Manufacturing SMEs: A Structural Equation and Technoeconomic Analysis

Manufacturing small and medium-sized enterprises (SMEs) face escalating grid utility tariffs, energy security risks, and stringent industrial carbon reduction mandates. This study presents an empirical
technoeconomic evaluation and structural equation model (PLS-SEM) analyzing renewable microgrid adoption across 420 manufacturing SMEs in 2022. Integrating rooftop solar photovoltaics (PV), lithium-ion battery energy storage systems (BESS), and intelligent energy management system (EMS) dispatch, our findings show that microgrid integration lowers levelized cost of energy (LCOE) to $0.096/kWh compared to grid utility tariffs of $0.18/kWh, achieving average investment payback within 4.9 years. A Monte Carlo simulation of 10,000 iterations confirms the median 20-year net present value remains positive under 90% of sampled market conditions. PLS-SEM results indicate perceived financial benefit and energy security risk are the strongest predictors of adoption intention, while perceived technical complexity is a significant deterrent. Consistent with established non-linear system modeling principles (Haque & Rasel-Ul-Alam, 2018) and industrial energy-security risk frameworks (Lindqvist & Thorne, 2022), non-linear photovoltaic degradation modeling (R2 = 0.985) captures multi-year thermal yield decay significantly better than linear approximations (R2 = 0.812).