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Are promotion programs needed to establish off-grid solar energy markets? Evidence from rural Burkina Faso

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  • Bensch, Gunther
  • Grimm, Michael
  • Huppertz, Max
  • Langbein, Jörg
  • Peters, Jörg

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.

Suggested Citation

  • Bensch, Gunther & Grimm, Michael & Huppertz, Max & Langbein, Jörg & Peters, Jörg, 2016. "Are promotion programs needed to establish off-grid solar energy markets? Evidence from rural Burkina Faso," Ruhr Economic Papers 653, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:653
    DOI: 10.4419/86788759
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    3. Blimpo, Moussa P. & Postepska, Agnieszka & Xu, Yanbin, 2020. "Why is household electricity uptake low in Sub-Saharan Africa?," World Development, Elsevier, vol. 133(C).
    4. Mukisa, Nicholas & Manitisa, Mele Sikimeti & Nduhuura, Paul & Tugume, Erick & Chalwe, Chanda Karen, 2022. "Solar home systems adoption in Sub-Saharan African countries: Household economic and environmental benefits assessment," Renewable Energy, Elsevier, vol. 189(C), pages 836-852.
    5. 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).
    6. Cantoni, Roberto & Skræp Svenningsen, Lea & Sanfo, Safiétou, 2021. "Unattainable proximity: Solar power and peri-urbanity in central Burkina Faso," Energy Policy, Elsevier, vol. 150(C).
    7. Luciane Lenz & Laura Montenbruck & Maximiliane Sievert, 2018. "Accidents caused by kerosene lamps—New evidence from African household data," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 7(4), July.
    8. 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.
    9. Muhammad Asyraf Azni & Rasyikah Md Khalid & Umi Azmah Hasran & Siti Kartom Kamarudin, 2023. "Review of the Effects of Fossil Fuels and the Need for a Hydrogen Fuel Cell Policy in Malaysia," Sustainability, MDPI, vol. 15(5), pages 1-16, February.
    10. Paul G. Munro & Shanil Samarakoon & Ulrich E. Hansen & Matthew Kearnes & Anna Bruce & Jamie Cross & Sarah Walker & Collen Zalengera, 2023. "Towards a repair research agenda for off-grid solar e-waste in the Global South," Nature Energy, Nature, vol. 8(2), pages 123-128, February.
    11. Wong, Jason Chun Yu & Blankenship, Brian & Harish, S.P. & Urpelainen, Johannes, 2022. "Increasing microsolar technology adoption: Efficacy of vouchers, cash transfers, and microfinance schemes," Energy Economics, Elsevier, vol. 110(C).
    12. Bensch, Gunther & Kluve, Jochen & Stöterau, Jonathan, 2021. "The market-based dissemination of energy-access technologies as a business model for rural entrepreneurs: Evidence from Kenya," Resource and Energy Economics, Elsevier, vol. 66(C).
    13. Ruhinduka, Remidius D. & Bensch, Gunther & Selejio, Onesmo & Lokina, Razack Bakari, 2024. "What could explain low uptake of rural electricity programs in Africa? Empirical evidence from rural Tanzania," Ruhr Economic Papers 1084, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    14. Girardeau, Hannah & Oberholzer, Alicia & Pattanayak, Subhrendu K., 2021. "The enabling environment for household solar adoption: A systematic review," World Development Perspectives, Elsevier, vol. 21(C).

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    More about this item

    Keywords

    energy access; energy poverty; technology adoption; branded products; cost-effectiveness; rural Africa;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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