Challenges to private investment in renewable energy projects: a systematic review

Abstract

The transition to renewable energy (RE) is now a global necessity to mitigate climate change and reduce greenhouse gas emissions. Despite declining technology costs, private investment in RE projects remains constrained by multiple barriers. While previous research has identified numerous barriers to renewable energy investment, most studies have focused on individual categories of barriers or specific national contexts. Consequently, there is still limited evidence providing an integrated assessment of the relative importance of different barrier dimensions and comparing their prevalence between developed and developing countries. This study addresses this gap through a systematic synthesis of the existing literature.

Using the PRISMA methodology, this study systematically reviews 26 peer-reviewed articles indexed in Scopus and Web of Science to identify and synthesize the barriers limiting private investment in renewable energy projects. The identified barriers were grouped into six dimensions: economic and financial, governance and institutional, market-related, geographical and ecological, technological, and sociocultural.

The review shows that governance and institutional barriers are the most frequently reported, appearing in 77% of the selected studies (20/26), followed by economic and financial barriers (69%, 18/26), market-related barriers (62%, 16/26), sociocultural barriers (58%, 15/26), technological barriers (54%, 14/26), and geographical and ecological barriers (46%, 12/26).

The comparison also highlights clear differences between economic contexts. Developing countries are primarily constrained by limited access to finance, weak institutional capacity, and restricted investment resources, whereas developed countries more frequently face challenges related to regulatory complexity, market design, and public acceptance of renewable energy projects.

These findings suggest that policies aimed at mobilizing private investment should be tailored to national contexts by combining stable regulatory frameworks, targeted financial instruments, and stronger institutional support to accelerate the deployment of renewable energy.

JEL Classification : O13, P28, P48, Q20

Paper type : Systematic literature review