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This study aims to focus on the transition of Kosovo’s energy generation sector from fossil fuels (94%), to renewable sources. The installation of 10 kW photovoltaic (PV) panels in individual houses will mitigate CO₂ emissions from electrical energy generation and contribute meeting the sustainable development goals (SDGs; 7, 11 and 13) set by United Nations General Assembly. This study case is based on the installation of PV panels on the roofs, and where possible on the facades of the private residential buildings in seven, the most populated towns of Kosovo (Prishtina, Prizren, Mitrovica, Peja, Gjakova, Ferizaj and Gjilan).

This study used the data, in regard to direct normal irradiation, altitude, coordinates, PV system configurations, specific PV power output and optimum tilt of PV panels specific for the selected locations,retrieved from Global Solar Atlas, which is a web-based-tool, as provided by “Solargis,”a company that provides online and commercial solar data resources, selected by The World Bank and the International Finance Corporation. The second software was RETScreen Expert, which is more sophisticated and allows input of more variables with regard to the proposed 10 kW PV system. With the use of RETScreen Expert software, the financial viability of the project, the equity payback period, and the reduction in greenhouse gas (GHG) emissions compared to the base case were assessed. Based on the gained data, the feasibility and outcome of the study case were assessed in terms of power generation, cost and comparison with the present PV installed capacities in Kosovo.

Small-scale solar energy generated from individual buildings can make great impact of country’s policies toward lowering CO₂ emission as one most influential greenhouse gas in rising average global temperature, improving air quality in towns by lowering emission of harmful gases and particulate matter (PM). As the study foresees installation of 10 kW of PV in residential houses, the calculated yearly energy generation would be around 15 MWh, which is twice of the average of real consumption of a household in Kosovo. This calculated energy generation from private houses is equal in capacity with generation of present PV parks that are connected on grid as reported from Transmission, System and Market Operator of the Republic of Kosovo. This proves that, if implemented, the study outcome would make Kosovo to meet the goal for a carbon free energy and meeting targets of at least three out of 17 SDG set by UNSC.

This paper’s model provides a ground for a transition of national energy sector from 90% fossils dependence to renewable energy sources (RES). Despite of some barriers such as cost of initial investment, energy storage, lack of government’s incentives and legislative base for households to become prosumer or at best energy self-sufficient buildings, this solution will make Kosovo harness its unused RES and meet targets of Paris Climate Agreement for net zero CO₂ emissions from energy production by 2050 and SDG targets.

Insufficient internal financing capacities and challenges to accessing external finance are crucial to small and medium-sized enterprises (SMEs) investment and growth. This study aims to investigate how SME leverage of bank financing is related to the investment decision.

Using Heckman’s two-step econometric modelling to correct for sample selection bias, this study investigates the effect of entrepreneur characteristics, firm characteristics and performance on firms’ capital structure choices conditional on new investment decisions.

The main results reveal that larger firms with growth aspirations tend to make new investments. In the second stage equation, empirical results demonstrate that among SMEs who made a new investment, those SMEs with highly educated owner/managers, on average, use more external financing (i.e. banks loan) rather than internal funds – also, the smaller the company, the less bank leverage. Compared to the limited liability legal form, SMEs registered as individual businesses have less bank financial leverage. These results confirm that internal capacities for funding new investments are limited, and hence small firms must rely on external finance.

This study provides a unique empirical investigation and evidence based on a sample of SMEs in Kosovo. To the best of the authors’ knowledge, this study is the first attempt to empirically analyse investment behaviour in relation to capital structure for SMEs in Kosovo and one of the few, in general, to consider the sample selection bias issues underpinning the other studies in this field. The analysis corrects for sample selection bias, using growth aspiration as an instrumental variable.