Lesson learned: the model and policy strategy for developing sustainable renewable energy for agricultural communities

¹ Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia
² Facuty of Agriculture, IPB University, Bogor, Indonesia
³ Faculty of Economics and Management, IPB University, Bogor, Indonesia

^* Corresponding author: d.rachmawatie@umy.ac.id

Abstract

Lack of access to electricity is seen as a significant constraint to economic growth and increased welfare in developing countries. Most literature agrees that access to electricity is necessary for poverty alleviation. It is to be expected, given that researchers must deal with multi-factorial systems, where energy is only one of a linked set of variables that determine poverty outcomes. The most frequently reported causal chain linking access to electricity to poverty’s impacts is to improve productivity or output of enterprises using electricity for their activities. Yogyakarta is one of the provinces in Indonesia that does not have the potential for fossil energy. This research was designed as a survey of 68 respondents who were electricity beneficiaries in Pantai Baru. Structural Equation Modeling-Partial Least Squares (SEM-PLS) was employed to analyze 23 indicators. The paper's novelty is on the method used in formulating the development of rural communities, which was then outlined by the Structural Equation Method – Partial Least Square, resulting in many key factors that affect empowerment improvement and agricultural community development. This study revealed critical variables in empowering rural communities, especially in utilizing renewable electricity, to encourage rural communities' development.