© S. Bhandari et al., Published by EDP Sciences, 2026

1 Introduction

Nepal, a landlocked country with vast hydropower potential, faces persistent energy shortages, particularly in rural and remote areas where grid expansion remains challenging [1,2]. The nation's energy consumption heavily relies on traditional biomass sources (similar to Thailand and elsewhere, see, [3–5]), including firewood, agricultural residues, and animal waste, which serve as primary household energy sources in rural regions. Additionally, Nepal depends on imported fossil fuels, such as petroleum and liquefied petroleum gas (LPG), which not only strain the national economy but also contribute to greenhouse gas emissions and environmental pollution [6]. The high cost of fuel imports and the fluctuating global oil prices make Nepal's energy security vulnerable [7–9].

Solar energy presents a sustainable and decentralized alternative, addressing both urban and rural energy needs [10,11]. Solar photovoltaic (PV) systems offer a means to reduce cost as well as dependence on biomass and fossil fuels while improving energy access in remote regions where grid connectivity is unfeasible [12–14].

Solar energy in Nepal encompasses not only photovoltaic (PV) electricity generation but also solar thermal systems that complement PV by providing water and space heating for residential, commercial, and institutional use. These technologies are particularly promising in remote and mountainous regions, where heating demand is high and grid connectivity is limited. The integration of both PV and thermal solutions could provide a more comprehensive renewable energy strategy for Nepal [15].

The government of Nepal has introduced various subsidies and incentives to encourage solar adoption; however, widespread implementation remains limited due to barriers such as high initial costs, low public awareness, inadequate financing mechanisms, and inconsistent policy enforcement [16]. Assessing the financial feasibility, socioeconomic benefits, and challenges of solar energy adoption is crucial for advancing Nepal's transition to a sustainable energy future [17].

Nepal has made significant strides in solar energy adoption, contributing to the country's high electrification rates—99% in urban areas and 95% in rural regions. This progress results from a combination of grid expansion and off-grid solar solutions, particularly supported by policies such as the Renewable Energy Subsidy Policy [17]. However, in remote areas, only about 15% of the population relies on solar lighting, underscoring the need for further investment in renewable infrastructure.

International comparisons provide meaningful insights into Nepal's policy framework and strategic direction [1,4,12,16,18,19]. For instance, solar companies in Central and West Africa address energy poverty by replacing hazardous fuel sources like kerosene, while solar power in remote Amazonian villages has improved daily life by providing reliable electricity for essential needs.

Nepal's government-driven subsidy programs, high rural electrification rates, and innovative use of solar mini-grids in mountainous regions offer a model that other developing countries with challenging terrains can learn from. Nepal's solar energy expansion demonstrates how well-designed policies, financial incentives, and community-focused solutions can accelerate renewable energy adoption [9]. The country's approach serves as an important case study for developing nations aiming to improve energy security and reduce dependence on non-renewable sources. By continuing to enhance its solar infrastructure, Nepal provides a valuable framework for countries seeking to transition toward sustainable energy solutions [20–24].

In recent years, Nepal has also advanced in utility-scale renewable energy deployment. The Nepal Electricity Authority (NEA) issued a major tender in 2024 for approximately 800 MW of grid-connected solar PV capacity, with proposals exceeding 3.6 GW and final allocations totaling about 960 MW under 25 yr power purchase agreements. Likewise, Greenzo Energy India and partners secured a license for a 120 MW ground-mounted solar farm in late 2024, scheduled for commissioning by 2025.

In parallel, smaller hybrid systems such as the 35 kW wind–solar mini-grid in Hariharpurgadi, Sindhuli District, financed by the Asian Development Bank, demonstrate how integrated renewables can serve remote communities. Together, these developments illustrate Nepal's growing commitment to scaling both centralized and decentralized renewable power generation.

This study aims to assess the financial viability of solar energy adoption across Nepal, focusing on urban, rural, and remote areas. By analyzing cost factors, potential savings, and government support mechanisms, this research provides valuable insights for policymakers, investors, and local communities on the economic advantages of solar energy. Additionally, the study explores the broader socioeconomic benefits, such as job creation, improved health conditions due to reduced indoor air pollution, and increased productivity in various sectors.

Furthermore, key challenges hindering solar energy adoption are identified, including financial constraints, policy gaps, and technical limitations. The findings of this research contribute to the ongoing discourse on renewable energy policies and strategies to enhance solar energy integration in Nepal's energy mix, ultimately supporting national and global sustainability goals.

2 Material and methods

This study employed a mixed-methods approach, integrating both quantitative and qualitative research designs to assess the financial viability, socioeconomic benefits, and adoption challenges of solar energy in Nepal's urban, rural, and remote regions. This triangulated methodology enabled the collection of both statistically representative data and rich contextual insights [2].

The data collection process was structured into four major components: quantitative household surveys, qualitative expert interviews, statistical analysis, and policy review. Each component played a crucial role in forming a holistic understanding of the current solar energy landscape in Nepal.

Quantitative household surveys utilized surveys and questionnaires to collect numerical data on household adoption rates and the financial viability of solar energy. Qualitative expert interviews consisted of in-depth discussions with experts to gather insights on policy implementation, infrastructural challenges, and barriers to adoption. Statistical analysis was conducted using data analytics and modelling to ensure statistical significance and evaluate the financial feasibility of solar energy.

Lastly, a policy review through document analysis was used to assess the policies, regulations, and government initiatives that influence solar energy adoption. Together, these methodologies aimed to provide a comprehensive understanding of the factors affecting solar energy adoption across different regions.

Table 1 shows solar energy adoption varies across urban, rural, and remote areas based on several key factors [25]. Average solar radiation, which represents the daily solar energy received per square meter, is generally higher in urban areas compared to remote regions, making urban locations more favorable for solar energy generation.

The estimated solar potential, or the theoretical maximum capacity for solar energy generation, is highest in rural areas due to the availability of larger land areas for installations. However, current solar installations are more concentrated in urban areas, primarily due to better infrastructure and higher investment levels. The household adoption rate also follows this trend, with urban areas showing greater adoption, while remote regions struggle due to financial and accessibility constraints.

The average installation cost of solar energy systems varies, with urban areas incurring higher expenses for advanced systems, whereas remote areas tend to have lower costs due to simpler setups [2]. Finally, the payback period, or the time required to recover the initial investment, is shorter in urban areas, making solar investments more attractive in cities. These factors collectively influence the expansion and feasibility of solar energy solutions across different regions in Nepal.

2.1 Sampling strategy

A total of 110 households were selected through a purposive stratified sampling technique. Nepal was divided into three primary strata: urban, rural, and remote, based on geographic accessibility, infrastructure development, and population density. Within each stratum, households were purposively chosen to ensure diversity in income level, electricity access, and geographic setting. Specifically, 40 households were selected each from urban and rural regions, and 30 from remote mountainous regions, reflecting relative population densities and accessibility.

This approach ensured inclusion of both grid-connected and off-grid communities, with deliberate emphasis on areas where solar energy could have differing impacts due to variations in infrastructure, awareness, and policy access. Additionally, survey responses were cross-verified with electricity bills and installation receipts, wherever available, to improve data reliability.

Table 2 shows the data comparing solar energy adoption across urban, rural, and remote areas, highlighting differences in costs, savings, and satisfaction. In terms of investment, urban areas have the highest initial cost for solar installations, followed by rural and remote areas. However, remote areas benefited from the highest government subsidy, compared to rural areas and urban areas.

Despite the higher costs in urban areas, households there experienced the most significant monthly savings on electricity, NPR 2640.00 savings in urban areas), with rural areas saving NPR 1980.00 and remote areas saving NPR 1320.00 per month. The payback period is found to be the shortest in urban areas (4.5 yearsyr), with rural areas at 5 years yr and remote areas at 6 yearsyr.

Regarding energy security, remote areas report the highest improvement (95%), followed by rural (90%) and urban areas (85%). Remote areas also showed the highest willingness to invest in solar solutions (80%), compared to 75% in rural areas and 70% in urban areas. Lastly, urban areas have the highest satisfaction with existing solar installations (90%), while satisfaction is found to be lower in rural (85%) and remote areas (80%).

These data illustrated the varied experiences and perceptions of solar energy in different areas, with remote regions benefiting the most from subsidies and improvements in energy security, while urban areas enjoy better savings and satisfaction.

2.2 Expert interview selection

For the qualitative component, eight to 10 expert interviews were conducted using purposive sampling [26]. Inclusion criteria included: (i) experience in Nepal's renewable energy sector; (ii) active role in policymaking, solar project implementation, or academic research; and (iii) minimum 5 yr of professional experience. Individuals were excluded if they lacked field experience or policy engagement related to solar energy in Nepal. This ensured the credibility and relevance of the perspectives gathered.

2.3 Data analysis

Quantitative data from the household survey were analyzed using Statistical Package for the Social Sciences (SPSS Ver. 26). Descriptive statistics were used to assess adoption rates, installation costs, and savings. Correlation and linear regression analyses were conducted to evaluate relationships between household income, subsidy access, and likelihood of adopting solar energy [27]. Results were interpreted at a 95% confidence level, with statistical significance determined at p < 0.05.

Qualitative data from expert interviews were coded thematically using NVivo to identify recurrent themes such as policy effectiveness, financial barriers, and local implementation gaps [28]. The integration of findings from quantitative and qualitative strands ensured both numerical robustness and contextual depth, contributing to a holistic assessment of Nepal's solar energy landscape.

A thorough review of existing solar energy policies, government subsidy programs, and financial incentives was conducted to assess their effectiveness, implementation gaps, and areas for improvement [9]. This work included analyzing official government reports, policy documents, renewable energy regulations, and subsidy frameworks provided by Nepal's Alternative Energy Promotion Center (AEPC) and the Nepal Electricity Authority (NEA). Special attention was given to the "Solar Rooftop Program" and other initiatives designed to promote distributed solar energy generation [29].

The policy review also examined international case studies and best practices from countries with successful solar energy programs to derive lessons and recommendations applicable to Nepal [12,24,30,31]. Policies related to grid integration of solar power, feed-in tariffs, and tax incentives were evaluated to determine their feasibility in the Nepalese context [10,12,32].

This comprehensive policy study aided in identifying barriers in solar energy promotion and proposed strategies for increasing government and private-sector participation. The paper offers a comprehensive and data-driven assessment of Nepal's present solar energy situation by combining quantitative analysis, expert interviews, and policy review. The findings are intended to help policymakers, investors, and the general public expedite Nepal's transition to a sustainable and energy-secure future.

3 Results and discussions

The findings of this study reveal the multifaceted impact of solar energy adoption in Nepal across economic, social, and environmental dimensions. Drawing on data from household surveys, expert interviews, and policy reviews, this section presents an integrated analysis of solar energy's financial viability, its broader socioeconomic implications, and the major barriers hindering its widespread adoption across urban, rural, and remote regions.

3.1 Solar viability and household cost savings

Solar energy emerged as a financially beneficial alternative to traditional grid electricity and biomass-based energy sources [33]. Surveyed households reported significant reductions in monthly electricity expenditures after installing solar photovoltaic (PV) systems. In urban areas, where grid electricity tariffs are relatively high, solar adoption led to greater annual savings.

A comparative analysis of household data showed that the average payback period for solar investments ranged from 4.5 yr in urban areas to 6 yr in remote regions, indicating long-term cost-effectiveness despite the high upfront investment. These findings were supported by a levelized cost of electricity (LCOE) analysis, which demonstrated a sharp decline in unit energy costs over a 10 yr period—from NPR 44.29/kWh in Year 1 to NPR 7.11/kWh in Year 10, confirming solar energy's increasing affordability over time.

Figure 1a depicts the influence of solar energy in Nepal in three principal domains: social, economic, and environmental advantages. The bar chart displays percentage values, revealing that environmental benefits exert the greatest influence at 85%, followed by social benefits at 80% and economic advantages at 70%. The evidence indicates that solar energy substantially enhances environmental sustainability, social welfare, and economic development. The graphic illustrates the beneficial impact of solar energy implementation in Nepal, underscoring its contribution to diminishing carbon emissions, enhancing quality of life, and fostering economic prospects. These findings highlight the significance of advocating for solar energy alternatives.

By reducing dependency on fossil fuels, cutting energy costs, providing job opportunities, and decreasing greenhouse gas emissions, solar energy fosters energy resilience and equity, particularly in underserved communities. A primary justification for embracing solar energy in Nepal is its capacity for significant reductions in residential electricity costs. Data collected from surveyed households indicate that families who invested in solar systems experienced annual savings ranging from NPR 10,001.00 to NPR 20,000.00.

These savings resulted from reduced reliance on expensive grid electricity and alternative fuel sources and firewood, which are commonly used in areas with limited or unreliable grid connectivity. A flowchart illustrating how solar energy contributes to social, economic, and environmental improvements, including poverty reduction, job creation, cost savings, carbon emission reduction, and waste management is shown in Figure 1b. The fundamental power output equation for a photovoltaic (PV) system is given by:

$$\text{Pout}=\eta .\text{A}.\text{G}.\text{cos}(\theta )$$(1)

where Pout = power output (W), η = conversion efficiency, A= surface area of solar panel, G = solar irradiance (w/m²) and θ = angle of incidence.

The study revealed that households in urban areas, where electricity tariffs are higher, could achieve greater financial benefits from solar installations, as they replace costly grid electricity with self-generated solar power. In contrast, in rural and remote regions, where electricity access is limited or non-existent, the financial savings were observed in the form of reduced fuel consumption for traditional energy sources like firewood and kerosene lamps. The transition to solar energy also provided indirect financial advantages by reducing health-related expenses, as it minimized indoor air pollution caused by burning biomass fuels.

However, despite the long-term economic benefits, the initial capital investment required for installing a solar energy system remains a major hurdle. The cost of setting up a household solar system ranged from NPR 100,001.00 to NPR 150,000.00 depending on factors such as system capacity, battery storage, and installation requirements. Many households, particularly those in low-income and rural areas, struggled to afford these upfront costs, making solar energy adoption financially challenging. This highlights the need for more accessible financing options, such as low-interest loans, micro-financing schemes, and pay-as-you-go (PAYG) models, which could help households transition to solar power without bearing the full burden of the initial costs. Building on these household-level savings, a more detailed cost-benefit analysis was conducted using the levelized cost of electricity (LCOE) model.

The transition to solar energy also provided indirect financial advantages by reducing health-related expenses, as it minimized indoor air pollution caused by burning biomass fuels. With the declining levelized cost of electricity (LCOE) and increasing panel efficiency, PV systems are now becoming feasible for powering induction cooktops, electric kettles, and other household cooking appliances. Hybrid solar PV-battery system s can provide sufficient energy for cooking during daylight hours and store excess electricity for evening use. Building on these household-level savings, a more detailed cost-benefit analysis was conducted using the levelized cost of electricity (LCOE) model.

Fig. 1 Impact of solar energy in Nepal. (a) Bar chart showing the percentage impact of solar energy across social, economic, and environmental benefits. (b) A flowchart illustration how solar energy contributes to various dimensions of development

Fig. 2 Comparative variation of Financial Viability, Socio-economic Impact, and Adoption Challenges (%) across urban, rural, and remote regions of Nepal. Financial viability declines toward remote areas, while adoption challenges rise and socio-economic impact decreases moderately.

3.2 Cost-benefit analysis

The levelized cost of electricity (LCOE) analysis provides valuable insight into the financial dynamics of solar energy adoption in Nepal [13]. In addition to examining the LCOE, this section also provides a comparative overview of electricity generation costs from solar PV, grid-based, and fossil-fuel-based off-grid systems to contextualize the financial competitiveness of solar energy in Nepal. In the first year, the LCOE is relatively high at NPR 44.29/kWh due to the substantial upfront capital investment required for solar energy systems. However, as operational and maintenance costs are distributed over time, the LCOE steadily declines, demonstrating the long-term cost-effectiveness of solar energy. By the 10th year, the LCOE stabilizes at NPR 7.11/kWh, making solar power a viable and economical alternative to conventional energy sources.

This trend highlights the financial feasibility and sustainability of solar adoption in Nepal. Households that invested in solar energy systems have experienced significant reductions in electricity costs. To evaluate the cost-effectiveness of energy sources, the LCOE formula was applied as:

$$\text{LCOE}=\frac{{{\displaystyle \sum }}_{t=1}^n\frac{C_t+O_t+F_t}{{\left(1+r\right)}^t}}{{{\displaystyle \sum }}_{t=1}^n\frac{E_r}{{\left(1+r\right)}^t}}$$(2)

Where C_t= capital expenditure in year t, O_t= operational and maintenance costs in year t, F_t= fuel costs in year t (zero for solar energy), E_r= energy generated in year t, and r = discount rate.

Table 3 demonstrates that despite high initial costs, solar energy becomes increasingly cost-effective over time. The findings underscore the importance of long-term investment, government subsidies, and public awareness to encourage greater adoption of solar power across Nepal and assists in assessing the financial feasibility of solar energy adoption in Nepal.

To provide a clearer understanding of the financial competitiveness of solar photovoltaic (PV) systems in Nepal, Table 4 presents a brief comparison of the current and projected electricity generation costs from solar PV, grid electricity, and fossil-fuel-based off-grid generation. These estimates are based on 2024 national averages and policy data published by the Alternative Energy Promotion Centre (AEPC), Nepal Electricity Authority (NEA), and the Asian Development Bank, with forward projections to 2030 that account for technological improvements, inflation, and market trends [11,13,14,34].

Table 4 indicate that solar PV electricity is already competitive with grid-supplied power on a levelized-cost basis and remains substantially cheaper than diesel-based off-grid generation. With continued reductions in module and storage costs, the economic advantage of decentralized solar systems is expected to expand further by 2030, reinforcing their role in enhancing household energy security and sustainable rural electrification in Nepal.

3.3 Subsidies and incentives and policy challenges: government support and implementation challenges

To encourage the adoption of solar energy, the Nepalese government has introduced subsidy programs and financial incentives to reduce the economic burden on households [16]. Government subsidies for solar system installations range from NPR 20,001.00 to NPR 40,000.00 depending on system size, location, and eligibility criteria. These subsidies have played a crucial role in increasing solar adoption rates, particularly in off-grid and semi-urban areas, where energy access is a major issue. However, despite the positive impact of subsidies, their inconsistent distribution and administrative hurdles have created challenges for potential adopters. Many households reported delays in subsidy approvals, complex application processes, and lack of transparency in fund disbursement. Additionally, government subsidies are often limited to specific system capacities and installation models, which restricts flexibility for households that may require customized solar solutions.

Government subsidies played a critical role in encouraging adoption, particularly among low-income households [16]. However, expert interviews highlighted several implementation bottlenecks—delays in fund disbursement, complex application processes, and inconsistent subsidy allocation across provinces. These issues limited the reach and effectiveness of subsidy programs, especially in high-need remote areas.

The Net Present Value (NPV) model (see Eq. (3)) confirmed that even with modest subsidies, investments in solar energy remained financially viable over time. Experts recommended refining the subsidy structure to target the most underserved regions and suggested introducing flexible financing models such as micro-loans and pay-as-you-go schemes.

The financial burden on households is reduced via net present value (NPV) analysis calculated as:

$$\text{NPV}={\displaystyle {\displaystyle \sum }_{t=0}^n}\frac{Rt-Ct}{{(1+r)}^t}\text{,}$$(3)

where Rt is revenue or saving per year. If NPV > 0, the investment is considered viable. Despite subsidies, bureaucratic delays and policy inconsistencies have hindered their effectiveness. An optimal subsidy allocation model needs to be developed to maximize adoption in Nepal.

Another major challenge was the limited awareness among the public regarding available financial support and subsidy programs. Many eligible households, particularly in rural areas, are unaware of the financial assistance they can receive, leading to underutilization of government schemes. Improving public outreach, simplifying application procedures, and ensuring timely subsidy disbursement could significantly enhance the effectiveness of these programs and accelerate solar energy adoption.

Moreover, international grants and donor-funded renewable energy programs contributed to Nepal's solar energy expansion. Partnerships with organizations such as the World Bank, Asian Development Bank (ADB), and United Nations Development Programme (UNDP) also facilitated funding for solar mini-grids and off-grid electrification projects. Strengthening collaborations with private investors and financial institutions would further expand access to solar energy financing and make adoption more feasible for low-income households.

3.4 Technical efficiency and maintenance constraints

Solar system performance across households showed an operational efficiency ranging between 60% and 80%, depending on panel quality, geographic location, and system maintenance. Remote areas reported lower efficiency rates, often due to inadequate servicing and the lack of trained technicians. Although solar panels have a typical lifespan of 15–20 yr, the absence of local maintenance infrastructure in rural and remote areas reduced their effective life span and overall performance.

Expert recommendations to address these technical efficiency challenges include: (i) expanding technical training programs for local technicians, (ii) establishing decentralized maintenance hubs to provide accessible servicing in rural areas, and (iii) integrating solar system maintenance into community-based capacity-building programs. Additionally, the efficiency of solar panels is affected by temperature variations, and thermal radiation losses from the panel surface can be represented using the Stefan-Boltzmann Law [35] as:

$$\eta {=}_{\eta }\left[1-\beta \left(T-T_{ref}\right)\right],$$(4)

where η_o= efficiency at reference temperature, β= temperature coefficient of efficiency, T= Operating temperature, and T_ref = reference temperature (25°C).

Collectively, these interventions: technical training, localized maintenance infrastructure, and awareness of thermal efficiency losses can improve the overall durability, performance, and accessibility of solar energy systems, thereby facilitating wider adoption and long-term success [36].

Remote mountainous regions of Nepal, such as the Everest, Annapurna, and Langtang areas, have witnessed increasing use of solar PV systems to meet electricity demands of tourist lodges, trekking facilities, and local households. These systems provide essential power for lighting, water heating, and communication, reducing the dependence on diesel generators that are expensive to operate and environmentally harmful. The Alternative Energy Promotion Centre (AEPC) and several international development partners are supporting projects to scale up solar mini-grids and hybrid PV-battery systems in these high-altitude areas. However, technical and logistical barriers remain significant. The installation and maintenance of PV systems are complicated by low temperatures, heavy snowfall, steep terrain, and limited transportation access. Addressing these challenges requires tailored engineering solutions, such as modular mounting structures, enhanced insulation for batteries, and localized technician training, to ensure reliable solar performance in extreme mountain environments.

Although Nepal's renewable energy sector has established regional training centers through the Alternative Energy Promotion Centre (AEPC) to provide technical support, systematic evaluation and maintenance programs remain limited. This gap is particularly relevant given recent global concerns about the long-term reliability of emerging photovoltaic technologies such as PERC (Passivated Emitter and Rear Cell) and TOPCon (Tunnel Oxide Passivated Contact), underscoring the need for enhanced technical resources and quality assurance frameworks.

3.5 Barriers to adoption: overcoming challenges for sustainable growth

The study highlighted three major constraints that continue to impede solar energy's widespread adoption in Nepal, despite its growing promise for sustainable development. One major issue is the high upfront installation cost, which places a huge financial strain on low-income homes and discourages initial investment. This issue is exacerbated by a lack of public awareness of the long-term benefits of solar energy, as well as the availability of government subsidies and support programs. Many potential customers are still hesitant to switch to solar systems due to a lack of knowledge. Furthermore, a scarcity of qualified technicians and maintenance services, particularly in rural and remote areas, weakens trust in the long-term dependability and effectiveness of solar installations. Policy inconsistency and inconsistencies in subsidy disbursement create additional uncertainty, preventing both consumers and private sector partners from participating in the market. Furthermore, logistical challenges in moving solar equipment to difficult or remote locations greatly increase project costs and cause delays in implementation. Addressing these limitations is critical for promoting long-term growth in the solar energy sector.

These findings were consistent across both household data and expert feedback. The regression analysis revealed a statistically significant correlation (p < 0.05) between household income and the likelihood of adopting solar energy, emphasizing the need for targeted financial support [25]. To overcome these challenges, a multi-faceted approach involving policy reforms, private-sector engagement, financial support mechanisms, and awareness campaigns is needed. Encouraging microfinance institutions and local banks to offer affordable loans for solar energy installations, along with public-private partnerships, can significantly enhance accessibility [37]. Additionally, integrating solar energy education into community programs and vocational training institutes can help build a skilled workforce to support long-term solar adoption [38].

Moreover, the total system cost of solar installations extends beyond panels and inverters to include battery storage, which remains relatively expensive and short-lived in Nepal's market. Addressing storage affordability through local manufacturing and recycling initiatives, coupled with greater consumer awareness and financing options, will be essential to strengthen public confidence and accelerate wider buy-in for solar technologies.

3.5.1 Regional supply and collaboration opportunities

Nepal currently relies heavily on imported solar equipment, particularly photovoltaic (PV) modules, inverters, and batteries sourced from China and India, reflecting global supply and cost dynamics. While Chinese manufacturers dominate the market due to large-scale production and lower prices, India's growing PV industry offers a geographically and strategically favorable partner for Nepal. Collaborative opportunities with Indian research institutions and private sector enterprises could facilitate technology transfer, workforce training, and localized assembly of solar components. The Alternative Energy Promotion Centre (AEPC) and several Nepalese universities have initiated discussions and pilot collaborations to enhance technical expertise and promote regional integration within the solar value chain. Strengthening such partnerships can reduce dependency on imported systems, lower costs, and contribute to the long-term sustainability of Nepal's solar energy sector.

3.6 Toward a sustainable energy transition

The combined analysis affirms that solar energy is both financially viable and socially beneficial, with potential to improve energy equity in Nepal. However, realizing its full potential requires coordinated efforts to strengthen policy frameworks, streamline subsidy processes, build technical capacity, and enhance community engagement [7,39].

Future interventions should prioritize remote and low-income regions where the impact of renewable energy access is greatest, yet adoption remains lowest. By addressing these barriers, Nepal can accelerate its transition toward an inclusive, sustainable, and resilient energy future [7,39–41]. Given Nepal's vulnerability to natural disasters such as earthquakes, solar PV systems offer critical advantages for emergency preparedness. Decentralized solar microgrids and battery-backed rooftop systems can ensure continuous power supply for essential services, such as healthcare, water pumping, and communications, during grid outages. Integrating solar PV into community disaster response plans can therefore enhance Nepal's overall energy resilience and reduce dependence on centralized grids during crises. Error! Not a valid bookmark self-reference. highlights the variations in financial viability, socioeconomic impact, and adoption challenges across different regions of Nepal, namely urban, rural, and remote areas. In terms of financial viability, urban areas exhibit the highest percentage (∼80%), reflecting strong economic support and investment opportunities, while rural areas show a moderate level (∼50%), and remote areas face significant economic constraints (∼30%) (see, Fig. 2).

A similar trend is observed in socioeconomic impact, where urban areas experience the greatest impact (∼90%), driven by better access to education, healthcare, and technology, followed by rural areas (∼60%) and remote areas (∼40%), which struggle with limited services and infrastructure.

Conversely, adoption challenges are highest in remote areas (∼80%), reflecting logistical barriers and a lack of awareness or education, while urban areas face the least adoption challenges (∼30%), benefiting from advanced infrastructure and innovation acceptance. These trends suggest that financial viability and socioeconomic impact are closely linked, with both declining as we move from urban to remote areas. Furthermore, adoption challenges tend to increase inversely with financial viability, as regions with lower financial resources face greater hurdles in adopting new initiatives.

Overall, urban areas are positioned to benefit the most, while remote areas are burdened by economic limitations, lower socioeconomic impact, and significant adoption challenges. In addition, Nepal has launched several initiatives to promote electric mobility, including programs supporting electric cars, buses, and three-wheelers (e-tuk-tuks). These efforts are reinforced by customs duty reductions and the National Electric Mobility Policy, which aim to reduce fossil fuel dependence, improve urban air quality, and advance the transition toward a low-carbon transport system.

4 Conclusions

Solar energy constitutes a highly sustainable and economical alternative to mitigate Nepal's escalating energy challenges, particularly in remote and underserved areas with restricted access to electricity. Solar power possesses significant potential to revolutionize Nepal's energy environment by offering a cleaner, more economical, and dependable energy source. The economic advantages of solar energy, including decreased long-term operational costs, less reliance on imported fuels, and the possibility for local job creation in installation and maintenance, are evident and compelling. Nevertheless, despite these advantages, Nepal must confront substantial obstacles to the extensive implementation of solar energy. A significant barrier is the substantial initial cost necessary for solar system installation, which can be daunting for most homes, businesses, and communities, especially in rural regions.

Moreover, there is inadequate data regarding the long-term financial savings and ecological advantages that solar energy can offer. A significant number of individuals are oblivious to the subsidies, financial incentives, or governmental programs that can alleviate the initial expenses. Moreover, ambiguous or contradictory governmental policies and laws regarding solar energy adoption generate uncertainty and inhibit investment in this area. In the absence of explicit standards and substantial incentives, the solar energy industry in Nepal will face challenges in realizing its full potential.

To address these problems and expedite the development of solar energy in Nepal, a diversified approach is necessary. Enhancing governmental policies that promote solar energy, including subsidies, tax incentives, and low-interest financing alternatives, is essential. The government must develop clear and consistent regulations that promote investment and ensure the market's long-term stability. Enhancing private sector involvement in solar energy initiatives is crucial, as it can provide essential funding, experience, and innovation to facilitate the growth of solar infrastructure nationwide. Extensive public education initiatives are essential to raise awareness to enhance understanding the advantages of solar energy and its accessibility. Informing communities about the environmental benefits, including diminished carbon emissions and the mitigation of climate change, alongside the economic advantages, such as reduced energy costs and job generation, can encourage increased use of solar technologies. Training initiatives aimed at cultivating local proficiency in solar technology and installation would enhance long-term sustainability and self-sufficiency in solar energy generation.

Nepal possesses substantial solar resources, characterized by consistent sunlight year-round, rendering it an optimal prospect for extensive solar energy initiatives. Utilizing this potential can substantially improve the nation's energy security by diminishing its dependence on imported fuels, which frequently experience price volatility and supply interruptions. By diversifying its energy sources and adopting renewable energy technology, Nepal may attain enhanced energy independence, diminish its carbon footprint, and provide a cleaner, greener future for future generations. Moreover, the advancement of solar energy infrastructure can generate novel economic prospects, enhance local enterprises, and promote a more sustainable and resilient economy. The inclusion of reliable storage systems further increases total setup costs, underscoring the need for consumer-friendly financing models and public trust in long-term solar performance.

In summary, the implementation of solar energy in Nepal is essential for attaining energy security and sustainability, while also providing a means to foster economic growth and mitigate environmental damage. By overcoming obstacles to solar energy adoption, enhancing governmental policies, promoting private-sector involvement, and informing the public, Nepal may realize the complete potential of solar energy and foster a more sustainable future for all its residents.

Acknowledgments

The first author gratefully acknowledges the support of Seed NanoTech International Inc., Canada, whose technical and institutional assistance greatly contributed to the completion of this research. The authors also extend sincere appreciation to all survey participants and energy experts for their valuable insights and cooperation throughout the study. Special appreciation is extended to the Government of Nepal for its continued efforts in promoting renewable energy initiatives and to Prince of Songkla University, Thailand, for awarding a doctoral scholarship that supported this research.

Funding

This research was partly supported by a PhD scholarship from Prince of Songkla University, Thailand.

Data availability statement

The data supporting the findings of this study are available from the corresponding author upon reasonable request. All relevant data generated or analyzed during this study are included in this published article and its supplementary materials, where applicable.

Conflicts of interest

The authors declare no competing financial interests or personal relationships that could have influenced the work reported in this paper.

Author contribution statement

Conceptualization, S.B.; Methodology, S.B. and C.R.; Validation, S.B. and C.R.; Formal Analysis, S.B.; Investigation, S.B.; Resources, S.B. and C.R; Data Curation, S.B.; Writing − Original Draft Preparation, S.B. and C.R.; Writing − Review & Editing, C.R.; Visualization, S.B. & C.R; Supervision, C.R. and K.T.; Project Administration: C.R. and K.T. All authors have read and agreed to the published version of the manuscript.

References

All Tables

All Figures

	Fig. 1 Impact of solar energy in Nepal. (a) Bar chart showing the percentage impact of solar energy across social, economic, and environmental benefits. (b) A flowchart illustration how solar energy contributes to various dimensions of development
In the text

	Fig. 2 Comparative variation of Financial Viability, Socio-economic Impact, and Adoption Challenges (%) across urban, rural, and remote regions of Nepal. Financial viability declines toward remote areas, while adoption challenges rise and socio-economic impact decreases moderately.
In the text