EfD Discussion Paper,
Environment for Development, University of Gothenburg

Abstract: The cost of providing electricity to the unconnected 1.1 billion people in developing countries is significant. High hopes are pinned on market-based dissemination of off-grid technologies to complement the expensive extension of public grid infrastructure. In this paper, we elicit the revealed willingness-to-pay for different off-grid solar technologies in a field experiment in rural Rwanda. Our findings show that households are willing to dedicate substantial parts of their budget to electricity, but not enough to reach cost-covering prices. Randomly assigned 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 cost-benefit analysis, we compare a subsidization policy for off-grid solar electrification to a grid extension policy. Our findings suggest that, for most of rural Africa, off-grid solar is the preferable technology to reach mass electrification, and that grid infrastructure should concentrate on selected prosperous regions.

Keywords: public infrastructure; technology adoption; electrification; willingness-to-pay; energy access

JEL-codes: D12; H54; O13; Q28; Q41

Language: English

37 pages, November 1, 2017

Full text files

efd_dp_17-15.pdf  Full text

Download statistics

• Environment for Development, University of Gothenburg
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Franklin Amuakwa-Mensah ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:gunefd:2017_015This page generated on 2024-09-13 22:14:35.