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Multilevel customer segmentation for off-grid solar in developing countries: Evidence from solar home systems in Rwanda and Kenya

Author

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  • Kennedy, Ryan
  • Numminen, Sini
  • Sutherland, Joseph
  • Urpelainen, Johannes

Abstract

Off-grid solar systems have a number of advantages in developing countries, but they rely on the capacity of private entrepreneurs to develop a reliable customer base and methods for recruiting these customers. This study uses data from 68,600 customers of BBOXX, a London-based off-grid solar power company, to classify customers and explore the demographic and recruitment factors associated with customer behavior. We compare a non-parametric clustering method for customer segmentation with linear models of customer behavior. The results show a number of important demographic and geographic factors that influence recruitment of the company's core customers, and demonstrates how linear models can be misleading. For example, women and those recruited by agent advertising or word-of-mouth are more likely in the company's core clientele, even though the linear models suggest that they may be less profitable customers.

Suggested Citation

  • Kennedy, Ryan & Numminen, Sini & Sutherland, Joseph & Urpelainen, Johannes, 2019. "Multilevel customer segmentation for off-grid solar in developing countries: Evidence from solar home systems in Rwanda and Kenya," Energy, Elsevier, vol. 186(C).
    • Handle: RePEc:eee:energy:v:186:y:2019:i:c:s0360544219313854
    DOI: 10.1016/j.energy.2019.07.058
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    Citations

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    Cited by:

    1. Nascimento, Viviane Tavares & Gimenes, Patricia Albuquerque & Morales Udaeta, Miguel Edgar & Veiga Gimenes, André L. & Riboldi, Victor Baiochi & Ji, Tuo, 2023. "Transition mapping for modern energy service provision under uncertainty: A case study from Brazil," Utilities Policy, Elsevier, vol. 84(C).
    2. Li, Jiaxin & Peng, Jiachao & Shuai, Chuanmin & Wang, Zihan & Huang, Fubin & Khayyam, Muhammad, 2022. "Does the solar PV program enhance the social empowerment of China's rural poor?," Energy, Elsevier, vol. 253(C).
    3. Best, Rohan, 2023. "Assets power solar and battery uptake in Kenya," Energy Economics, Elsevier, vol. 123(C).
    4. Lukuyu, June & Shiran, Myriam & Kennedy, Ryan & Urpelainen, Johannes & Taneja, Jay, 2023. "Purchasing power: Examining customer profiles and patterns for decentralized electricity systems in East Africa," Energy Policy, Elsevier, vol. 172(C).
    5. Mukeshimana, Marie Claire & Zhao, Zhen-Yu & Nshimiyimana, Jean Pierre, 2021. "Evaluating strategies for renewable energy development in Rwanda: An integrated SWOT – ISM analysis," Renewable Energy, Elsevier, vol. 176(C), pages 402-414.
    6. Bisaga, Iwona & Parikh, Priti & Tomei, Julia & To, Long Seng, 2021. "Mapping synergies and trade-offs between energy and the sustainable development goals: A case study of off-grid solar energy in Rwanda," Energy Policy, Elsevier, vol. 149(C).
    7. Vivien Kizilcec & Priti Parikh & Iwona Bisaga, 2021. "Examining the Journey of a Pay-as-You-Go Solar Home System Customer: A Case Study of Rwanda," Energies, MDPI, vol. 14(2), pages 1-26, January.
    8. Jaiswal, Deepak & Deshmukh, Arun Kumar & Thaichon, Park, 2022. "Who will adopt electric vehicles? Segmenting and exemplifying potential buyer heterogeneity and forthcoming research," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).

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