What kind of electricity makes sense in rural Africa?

South Asia has made tremendous progress in connecting rural areas to the electricity grid but the number of people in Africa without access has scarcely changed since 2010.

More than half a billion people in Africa don’t have access to electricity, meaning the continent hosts 72% of the world’s non-electrified population.

The UN sustainable development goals have set a universal goal of ensuring access to affordable, reliable, sustainable and modern energy for all by 2030. To achieve this, the continent will require a big electrification push.

But what kind of electricity makes sense in rural Africa to make the most of available budgets?

Over the past decade or so, a range of new off-grid solar products have emerged. They don’t run machinery, but they light rooms, power radios or TVs and charge cellphones. They’re substantially cheaper than expanding the national electricity grid.

We found low consumption patterns in newly electrified areas and electricity mainly being used for lighting and entertainment. We saw very little productive use.

In two more recent studies, we tried to understand what people in rural areas really want. For this purpose, we used two different willingness-to-pay techniques, in rural Burkina Faso, Senegal and Rwanda, to estimate how much people are willing to pay for electricity.

We asked people in the three countries how much they would be willing to pay for a solar lamp, a solar home system and a grid connection.

Of course, such hypothetical statements cannot simply be taken at face value.

The study in Rwanda uses a real purchase offer. People were invited to bid on three different sizes of solar kits.

Both studies showed that households were willing to pay a large share of their monthly income for electricity.

In the three-country study, households were willing to spend between 16% and 23% of their monthly income for grid electricity and between 6% and 15% for the off-grid options.

In Rwanda, households were willing to invest 20% of their monthly income to buy a very small solar lamp, a share that goes up to almost 70% once the solar kit also enables phones charging.

More studies need to be done in other settings.

Jorg Peters: Professor, Leibniz Institute for Economic Research. Maximiliane Sievert: RWI deputy head: Research Group Climate Change in Developing Countries, Leibniz Institute for Economic Research.

The Conversation

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