There is an ongoing debate among policy makers, international donors and researchers about how to provide access to energy to poor rural areas.
For many years, most of the funding went to large-scale infrastructure projects to expand national power grids. However, network extensions in remote and poor areas are expensive and difficult to maintain. At the same time, concerns about climate change, coupled with falling prices for solar PV and batteries, have made solar-powered electricity an attractive investment (see also this blog post in German) .
Off-grid energy as the key to fighting poverty?
In particular, pico-solar products, such as small portable solar lights, have gained increased political attention and international funding. These products have low start-up costs, require little maintenance, and do not pose the management problems typically associated with national networks or even mini-networks. Therefore, photovoltaic products charged with solar energy are considered a possible solution to address both energy poverty and energy sustainability in the near future.
Solar lanterns could replace kerosene lighting, which is still used in about 500 million homes. Emissions from kerosene lamps contribute to global warming and severe indoor air pollution . In addition, kerosene lamps usually provide poor quality illumination, around 10 lumens, whereas, for example, a standard LED lamp provides around 500 lumens. On the other hand, solar lanterns provide minimal access to energy: they cannot power radios, televisions, refrigerators, or other appliances that people wish to have as they get rich .
While researchers agree that access to off-grid energy is important for economic growth, there is little empirical evidence of the impact that off-grid energy access has on poverty. That is why we conducted a political field experiment in Kenya in collaboration with various political partners . We analyzed the demand, use and effects of small portable solar lights, combining survey data with data from sensors developed by spin-off ETH Bonsai Systems.
Poor families would have to spend a lot on little energy
At the beginning of our experiment, nearly 1,400 families surveyed used small kerosene (tin) lanterns with an open flame to light. A typical household spends between 5% and 10% of its total cash expenditure on energy, which is used primarily for kerosene. In comparison, European households spend on average around 4% of their total expenditure on energy, but consume more than five times as much . We found a strong demand for solar lanterns among poor rural households, but found that they responded very strongly to changes in costs. At the current market price of US $ 9, 29% of households bought a light; if the lights were sold at a subsidized price of $ 4, the demand would more than double (69%).
Limited financial advantage …
Sunlight usually replaces one of the household kerosene lanterns. As a result, households save about 2% of their total monthly cash spending by spending less on kerosene. We found little evidence that access to better lighting improves children’s performance in school or increases working hours for adults. If only direct economic benefits were considered, this would suggest that switching from kerosene to solar lighting may not always be profitable. However, this result could change if kerosene prices rise or PV prices fall further.