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How SMEs can be riskier?

Green renewable projects are often termed as “Riskier SMEs” for a variety of reasons. The risks include new technologies as they are still in the testing stage and getting reliable investment from Asian banks are some major concerns.

Even though, the statement has been challenged by the existence of projects which are successful in technologies that weaken in many parts of the world where the validity is still working. The nature of most of the green renewable technologies is also intermittent resulting in risking the SMEs.

The energy input is also not secured as it is beyond any human control. Technologies related to such factors make it unreliable as it’s a grid-connected with an electricity source where the cost of green energy projects is increased even if the technologies’ costs are affordable.

The major two sources wind and solar energies are not adequately available all the time irrespective of day, month, or season makes the projects related to electricity generation more intermittent. The shortcomings are usually improved by backing up with fossil-fueled generators which are grid-connected. Even though for environmental reasons, solar and wind energy services are used in Asian countries but it’s faced obstacles in financial prospects.

The low rate of return in green renewable energy projects is also comparably one of the major reasons in green renewable energy projects where the prices are higher to generate high electricity and thereby the competitiveness is challenged.

Source:- Handbook of Green Finance

 

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