Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda
High hopes are pinned on market-based dissemination of off-grid technologies to complement expensive grid extension in providing electricity to the nearly 1 billion unconnected people in developing countries. In this paper, we elicit the revealed willingness to pay for different solar technologies in rural Rwanda. Households are willing to dedicate substantial parts of their budget to electricity, but not enough to reach cost-covering prices. Randomly extended payment periods do not alter this finding. We interpret the results from two perspectives. First, we examine whether the United Nations’ universal energy access goal can be reached via unsubsidized markets. Second, in a stylized welfare analysis, we compare a subsidization policy for off-grid solar electrification to a grid extension policy. Our findings suggest that off-grid solar is the preferable technology to reach mass electrification in rural areas and that grid infrastructure should concentrate on selected regions with promising business prospects.
Grimm, M., L. Lenz, J. Peters und M. Sievert (2020), Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda. Journal of the Association of Environmental and Resource Economists, 7, 3, 417-454
DOI: 10.1086/707384