IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v192y2024ics1364032123010559.html
   My bibliography  Save this article

Socioeconomic impacts of solar home systems in rural Ethiopia

Author

Listed:
  • Beyene, Abebe D.
  • Mekonnen, Alemu
  • Jeuland, Marc
  • Czakon, Sebastian

Abstract

Off grid solar electrification of remote, rural communities that are difficult to reach cost-effectively through grid extension is a core component of Ethiopia’s energy access strategy. One emerging business model in such locations, which aims to maintain affordability and access for customers with severe liquidity constraints, is the Pay-as-you-go (PAYGO) approach to solar home system (SHS) sales. This study focuses on the socioeconomic impacts of PAYGO SHS that are currently being marketed by a private supplier in the Amhara region of Ethiopia. The study employs descriptive and propensity score matching analysis to examine a range of impacts on those adopting this technology. The use of PAYGO SHS is shown to have no discernible impact on household income, but it does reduce monthly energy expenditure. Use of a PAYGO SHS also allows school-aged children to extend their study hours into the night, improves the self-reported health of family members, allows women to re-allocate their time across various activities, and enhances perceived safety and security. The role of SHS in financial inclusion and access to information is also discussed. Achieving wider dissemination of SHS to target populations will require more appropriate and effective intervention and marketing effort.

Suggested Citation

  • Beyene, Abebe D. & Mekonnen, Alemu & Jeuland, Marc & Czakon, Sebastian, 2024. "Socioeconomic impacts of solar home systems in rural Ethiopia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 192(C).
    • Handle: RePEc:eee:rensus:v:192:y:2024:i:c:s1364032123010559
    DOI: 10.1016/j.rser.2023.114197
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032123010559
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2023.114197?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kenny Baumli & Tooraj Jamasb, 2020. "Assessing Private Investment in African Renewable Energy Infrastructure: A Multi-Criteria Decision Analysis Approach," Sustainability, MDPI, vol. 12(22), pages 1-19, November.
    2. Michael Grimm & Anicet Munyehirwe & Jörg Peters & Maximiliane Sievert, 2017. "A First Step up the Energy Ladder? Low Cost Solar Kits and Household’s Welfare in Rural Rwanda," The World Bank Economic Review, World Bank, vol. 31(3), pages 631-649.
    3. Ipsita Das & Thomas Klug & P. P. Krishnapriya & Victoria Plutshack & Rajah Saparapa & Stephanie Scott & Erin Sills & Njeri Kara & Subhrendu K. Pattanayak & Marc Jeuland, 2023. "Frameworks, methods and evidence connecting modern domestic energy services and gender empowerment," Nature Energy, Nature, vol. 8(5), pages 435-449, May.
    4. Meles, Tensay Hadush & Mekonnen, Alemu & Beyene, Abebe D. & Hassen, Sied & Pattanayak, Subhrendu K. & Sebsibie, Samuel & Klug, Thomas & Jeuland, Marc, 2021. "Households' valuation of power outages in major cities of Ethiopia: An application of stated preference methods," Energy Economics, Elsevier, vol. 102(C).
    5. Mendola, Mariapia, 2007. "Agricultural technology adoption and poverty reduction: A propensity-score matching analysis for rural Bangladesh," Food Policy, Elsevier, vol. 32(3), pages 372-393, June.
    6. Michael Grimm & Luciane Lenz & Jörg Peters & Maximiliane Sievert, 2020. "Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(3), pages 417-454.
    7. Mekonnen, Alemu & Hassen, Sied & Jaime, Marcela & Toman, Michael & Zhang, Xiao-Bing, 2023. "The effect of information and subsidy on adoption of solar lanterns: An application of the BDM bidding mechanism in rural Ethiopia," Energy Economics, Elsevier, vol. 124(C).
    8. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    9. Qureshi, Tahir Masood & Ullah, Kafait & Arentsen, Maarten J., 2017. "Factors responsible for solar PV adoption at household level: A case of Lahore, Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 754-763.
    10. Yuya Kudo & Abu S Shonchoy & Kazushi Takahashi, 2019. "Can Solar Lanterns Improve Youth Academic Performance? Experimental Evidence from Bangladesh," The World Bank Economic Review, World Bank, vol. 33(2), pages 436-460.
    11. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    12. Tsoutsos, Theocharis & Frantzeskaki, Niki & Gekas, Vassilis, 2005. "Environmental impacts from the solar energy technologies," Energy Policy, Elsevier, vol. 33(3), pages 289-296, February.
    13. Jeuland, Marc & Fetter, T. Robert & Li, Yating & Pattanayak, Subhrendu K. & Usmani, Faraz & Bluffstone, Randall A. & Chávez, Carlos & Girardeau, Hannah & Hassen, Sied & Jagger, Pamela & Jaime, Mónica , 2021. "Is energy the golden thread? A systematic review of the impacts of modern and traditional energy use in low- and middle-income countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    14. Bensch, Gunther & Grimm, Michael & Langbein, Jörg & Peters, Jörg, 2015. "Impacts of access to solar energy on rural households: An evaluation of a Netherlands supported programme in Burkina Faso," RWI Materialien 95, RWI - Leibniz-Institut für Wirtschaftsforschung.
    15. De Groote, Olivier & Pepermans, Guido & Verboven, Frank, 2016. "Heterogeneity in the adoption of photovoltaic systems in Flanders," Energy Economics, Elsevier, vol. 59(C), pages 45-57.
    16. Jörg Peters & Maximiliane Sievert, 2016. "Impacts of rural electrification revisited – the African context," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 8(3), pages 327-345, July.
    17. Wagner, Natascha & Rieger, Matthias & Bedi, Arjun S. & Vermeulen, Jurgen & Demena, Binyam Afewerk, 2021. "The impact of off-grid solar home systems in Kenya on energy consumption and expenditures," Energy Economics, Elsevier, vol. 99(C).
    18. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    19. Aklin, M. & Bayer, P. & Harish, S.P. & Urpelainen, J., 2018. "Economics of household technology adoption in developing countries: Evidence from solar technology adoption in rural India," Energy Economics, Elsevier, vol. 72(C), pages 35-46.
    20. Lin, Boqiang & Kaewkhunok, Suppawit, 2021. "The role of socio-Culture in the solar power adoption: The inability to reach government policies of marginalized groups," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    21. Gustavsson, Mathias, 2007. "Educational benefits from solar technology--Access to solar electric services and changes in children's study routines, experiences from eastern province Zambia," Energy Policy, Elsevier, vol. 35(2), pages 1292-1299, February.
    22. Sievert, Maximiliane & Steinbuks, Jevgenijs, 2020. "Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa," World Development, Elsevier, vol. 128(C).
    23. Ehsanul Kabir & Ki-Hyun Kim & Jan E. Szulejko, 2017. "Social Impacts of Solar Home Systems in Rural Areas: A Case Study in Bangladesh," Energies, MDPI, vol. 10(10), pages 1-12, October.
    24. Gustavsson, Mathias & Ellegård, Anders, 2004. "The impact of solar home systems on rural livelihoods. Experiences from the Nyimba Energy Service Company in Zambia," Renewable Energy, Elsevier, vol. 29(7), pages 1059-1072.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meriggi, Niccolò F. & Bulte, Erwin & Mobarak, Ahmed Mushfiq, 2021. "Subsidies for technology adoption: Experimental evidence from rural Cameroon," Journal of Development Economics, Elsevier, vol. 153(C).
    2. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
    3. Bensch, Gunther & Grimm, Michael & Huppertz, Maximilian & Langbein, Jörg & Peters, Jörg, 2018. "Are promotion programs needed to establish off-grid solar energy markets? Evidence from rural Burkina Faso," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 1060-1068.
    4. Liane Faltermeier & Awudu Abdulai, 2009. "The impact of water conservation and intensification technologies: empirical evidence for rice farmers in Ghana," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 365-379, May.
    5. Subedi, Mukti Nath & Bharadwaj, Bishal & Rafiq, Shuddhasattwa, 2023. "Who benefits from the decentralised energy system (DES)? Evidence from Nepal’s micro-hydropower (MHP)," Energy Economics, Elsevier, vol. 120(C).
    6. Mishra, Ashok K. & Kumar, Anjani & Joshi, Pramod K. & D'souza, Alwin, 2016. "Impact of contracts in high yielding varieties seed production on profits and yield: The case of Nepal," Food Policy, Elsevier, vol. 62(C), pages 110-121.
    7. Xavier Lemaire, 2018. "Solar home systems and solar lanterns in rural areas of the Global South: What impact?," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 7(5), September.
    8. Islam, Abu Hayat, 2015. "Can Integrated Rice-Fish System Increase Welfare of the Marginalized Extreme Poor in Bangladesh? A DID Matching Approach," 2015 Conference, August 9-14, 2015, Milan, Italy 211792, International Association of Agricultural Economists.
    9. Pelz, Setu & Aklin, Michaël & Urpelainen, Johannes, 2021. "Electrification and productive use among micro- and small-enterprises in rural North India," Energy Policy, Elsevier, vol. 156(C).
    10. Ashok K. Mishra & Anjani Kumar & Pramod K. Joshi & Alwin D'Souza, 2018. "Impact of contract farming on yield, costs and profitability in low‐value crop: evidence from a low‐income country," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(4), pages 589-607, October.
    11. Sant’Anna, Pedro H.C. & Zhao, Jun, 2020. "Doubly robust difference-in-differences estimators," Journal of Econometrics, Elsevier, vol. 219(1), pages 101-122.
    12. Bensch, Gunther & Grimm, Michael, 2024. "Behavioural constraints in energy technology uptake: Evidence from real-purchase offers in rural Rwanda and Senegal," Ruhr Economic Papers 1081, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Iacus, Stefano M. & Porro, Giuseppe, 2007. "Missing data imputation, matching and other applications of random recursive partitioning," Computational Statistics & Data Analysis, Elsevier, vol. 52(2), pages 773-789, October.
    14. Kent Eliasson & Pär Hansson, 2016. "Are workers more vulnerable in tradable industries?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 283-320, May.
    15. Dettmann, Eva & Becker, Claudia & Schmeißer, Christian, 2010. "Is there a Superior Distance Function for Matching in Small Samples?," IWH Discussion Papers 3/2010, Halle Institute for Economic Research (IWH).
    16. Eliasson, Kent, 2006. "The Role of Ability in Estimating the Returns to College Choice: New Swedish Evidence," Umeå Economic Studies 691, Umeå University, Department of Economics.
    17. Ashok K. Mishra & Anjani Kumar & Pramod K. Joshi & Alwin D'Souza, 2018. "Cooperatives, contract farming, and farm size: The case of tomato producers in Nepal," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 865-886, October.
    18. Díaz, Juan José & Jaramillo, Miguel, 2006. "An Evaluation of the Peruvian "Youth Labor Training Program" - PROJOVEN," IDB Publications (Working Papers) 3000, Inter-American Development Bank.
    19. Caliendo, Marco & Mahlstedt, Robert & Mitnik, Oscar A., 2017. "Unobservable, but unimportant? The relevance of usually unobserved variables for the evaluation of labor market policies," Labour Economics, Elsevier, vol. 46(C), pages 14-25.
    20. Gao, Qin & Zhai, Fuhua & Garfinkel, Irwin, 2010. "How Does Public Assistance Affect Family Expenditures? The Case of Urban China," World Development, Elsevier, vol. 38(7), pages 989-1000, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:192:y:2024:i:c:s1364032123010559. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.