Economic Assessment of Sustainable Tourism Driven by Renewable Energy: A Case Study of the andaman and Nicobar Islands

This paper investigates the economic evaluation of sustainable tourism fueled by renewable energy in the Andaman and Nicobar islands, focusing on financial viability, sustainability and policy implications. The tourism sector in the Andaman and Nicobar islands is characterized by high operational costs, driven by reliance on diesel-based power generation, leading to economic inefficiency and environmental degradation. The study seeks to answer research question: what are the effects of renewable energy use on the economic performance and sustainability of tourism enterprises in the region? The main research objective is to assess the effects of integrating renewable energy on revenue generation, operational cost reduction and sustainable growth. Using a descriptive and analytical research approach, the study employs both primary and secondary data collected from 100 tourism enterprises through surveys, interviews and official documents. Quantitative analysis techniques, such as correlation, regression, t- tests, ANOVA and cost-benefit analysis were conducted using SPSS and Excel. Hypothesis testing confirms that the adoption of renewable energy has a significant positive impact on financial performance, with strong positive correlations between renewable energy use, cost savings and revenue increases. Solar, hybrid and community- based schemes have high ROI values (65-76%), short payback periods (3.5-6 years) and substantial energy cost savings (upto 40%). Larger, eco-conscious businesses perform better due to economies of scale and sustainability advantages. The proposed policy interventions include financial support, PPP-based micro-grid development, net- metering, community engagement and capacity-building initiatives to promote the adoption of renewable energy, in line with SDG-7 and SDG-8. The limitations of this research include the small sample size, potential biases in self- reported data and the lack of longitudinal analysis. Future research should focus on comparative studies of island economies and investigate the social and environmental co-benefits of renewable energy adoption. In conclusion, the results of this research verify that the adoption of renewable energy not only leads to cost savings but also improves economic resilience, sustainability and energy independence in tourism businesses in the Andaman and Nicobar islands.