The United Nations Sustainable Energy for All (SE4All) initiative has the ambition to reach universal energy access until 2030 by providing sustainable energy access to all those 1.3 billion people in the developing world who still lack access. Since electricity networks are widely unavailable in rural Africa, off-grid solar technologies in most cases constitute the most obvious first step on the ladder towards modern energy usage. The technologies targeting single households with relatively low energy consumption are Pico-PV kits and Solar Home Systems. Pico-PV kits comprise a small panel and an LED-spotlight and sometimes also a mobile phone charger. Solar Home Systems are defined through comparably higher power dimensions. They allow for the usage of electric light bulbs and low-power appliances, such as radios or small TVs. SE4All strongly counts on the dissemination of the technologies via markets implying a cost covering contribution of the hitherto non-connected households. The main research question pursued in this project is whether households in remote areas can afford making this cost covering contribution. For this purpose, we conduct a field experiment in order to elicit the households’ willingness-to-pay (WTP). We furthermore examine two potentially important drivers of WTP: i) We offer three different solar technologies with an increasing spectrum of energy services they can offer. ii) We randomly assign three different payment schemes, mimicking market typical services: a payment period of 7 days, a timeframe of 6 weeks and instalment payments in the course of 5 months. In cooperation with University of Passau and ZEF Bonn, the RWI research team will implement a field experiment using the Becker-DeGroot-Marschak method with a real purchase offer. Households have to declare their WTP for the solar technologies before a price is randomly assigned. Only if the stated WTP exceeds the drawn price, they can buy the kit at this price. The mechanism provokes an optimal price bidding strategy among the participants and thereby is expected to reveal their real WTP. Moreover, we will administer a socio-economic questionnaire to probe into differences in WTP by age, education, and income. The questionnaire will also contain measures for risk aversion, consumer resistance, present bias, and liquidity constraints – further important impediments of adoption next to lack of experience and information. Results of this project will inform future policy in the energy access sector. The question whether the poor are able and willing to pay for different solar technologies is crucial for the decision on whether subsidies are needed in order to achieve the universal access goals. Not least, we will contribute to the academic literature on technology adoption in developing countries.
Currently there are no publications available for this project