Best buys for Africa: Off-Grid Rural Electrification in Africa

Fast-track Analysis

“Off-grid rural electrification” reminds most of us about bringing solar lanterns to rural communities who otherwise use kerosene for lighting. The menu of technological options is, however, much broader than solar lanterns. 2019 Jaglin categorizes off-grid, or “autonomous,” generation technologies as mini-grids, energy kiosks, and individual systems. Each of these systems can come with a range of technological options.

Similarly, the use of electricity is also not limited to household lighting and can include other appliances and productive use. For instance, in a recent study in Kenya (2017 Rom), 48% of rural households reported using cell phone light as their secondary source of lighting, after Kerosene (99%). The same population’s use of solar lights and electricity-powered lights is at 6% and 2%, respectively. Mobile phones, in such a population, clearly dominate the electricity use.
More than ever before, donors and governments are concerned about rural electrification. In the pursuit of economic development and equitable access to electricity, significant amounts of funding have been driven towards rural electrification in recent years. Since 2000, the share of people with access to electricity in the least developed countries has more than doubled (sustainabledevelopment.un.org/sdg7). The experience with the impact of energy access on welfare, however, is mixed. As shown in the benefits section of this brief, many studies find no attributable impact in the short to medium term.

The nature demand for off-grid electricity solutions is also complex. For instance, off-grid solutions such as solar home system are popular in Haiti for on-grid applications as opposed to off-grid. The solar home system can perform a coping function and address the reliability issues of the grid. The rural population is also often reported to have negligible demand and low willingness to pay for electricity. 2015 Peters reports an average of 4.6 to 11 kWh of electricity consumption for off-grid households that are provided solar home systems or connected to a village grid per month in Rwanda, Senegal, and Burkina Faso, compared with 867 kWh in the US (www.eia.gov/tools/faqs/faq.php?id=97&t=3). 
2019 Grimm suggests that off-grid solar is the most cost-effective technology for most of rural Africa. Other studies (2018 Leo, 2016 Baurzhan, and 2017 Robert) suggest mini-grids and grid extension are the solution and highlight the importance of understanding the use of electricity beyond lighting (industrial, air conditioning, etc.) when thinking about increasing access to electricity.

This brief uses principles of cost-benefit analysis to bring the readers’ attention to the nuances and contextual parameters that can help in scaling up access to electricity. Furthermore, the paper provides a crude estimate of the benefit-cost ratio based on preliminary calculations.