Ruhr Economic Papers

Ruhr Economic Papers #653

Are Promotion Programs Needed to Establish Off-Grid Solar Energy Markets? Evidence from Rural Burkina Faso

by Gunther Bensch, Michael Grimm, Max Huppertz, Jörg Langbein and Jörg Peters

RWI, 10/2016, 28 S./p., 8 Euro, ISBN 978-3-86788-759-5 DOI: 10.4419/86788759

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Abstract

Off-grid solar electric power is a promising technology for remote regions in rural Africa where expansion of the electricity grids is prohibitively expensive. Using household data from a target region of an off-grid solar promotion program in Burkina Faso, this paper explores the role of quality-verified branded solar home systems (SHS) versus non-branded ones. We find that the adoption rate of non-branded SHS is considerably higher at 36 percent compared to eight percent for branded SHS. We compare potential quality differences as well as the cost-effectiveness of branded and non-branded solar. We show that non-branded SHSs provide a similar service level as branded solar, that they do not fall behind in terms of consumer satisfaction and durability, and that non-branded products are more cost-effective. These findings suggest that promotion programs and branded solar products might not be needed to establish sustainable off-grid solar markets. The challenge however is to reach the very poor who are unable to bring up investment costs for any electricity.

JEL-Classification: D12, D40, O13, O33

Keywords: Energy access; energy poverty; technology adoption; branded products; costeffectiveness; rural Africa

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