Anecdotal evidence in the world of off-grid lighting solutions in developing countries has pointed to a so-called “energy ladder,” in which some first-time buyers of small solar-powered products such as solar lanterns eventually buy into much larger and more expensive home systems. For the first time, a research team from Humboldt State University in the United States is taking a rigorous look at this assumption.
Over the course of the next 12 months, researchers from the University’s Schatz Energy Research Center (SERC) will conduct a study in Uganda, with funding from UNCDF’s CleanStart Programme. The results will be published in 2017.
“What happens after someone has their first taste of solar-powered lights?” says Vincent Wierda, CleanStart Programme Manager. “Do they stop using kerosene? Do they move onto bigger systems that can power multiple lights, maybe even a TV? Do energy loans or pay-as-you-go financing options help them to move faster up the ladder?”
The study will also provide much-need data on the ways that energy product purchases are affected by the availability of consumer financing options, access to mobile phones or other mobile devices, access to mobile banking and other related factors.
Thanks to current market conditions, Uganda is becoming a test bed for innovations in distributed energy and financial solutions that help reduce the affordability barrier for low-income consumers. The statistics speak for themselves: 85 percent of the Ugandan population live without access to grid electricity, 85 percent use formal and informal financial services, 52 percent own a mobile phone and, finally, there are now more registered mobile money accounts than banks accounts in the country.
The research team, headed by Professor Arne Jacobson, Director of SERC, will study a random sample of hundreds of off-grid solar product buyers in Uganda and record their purchasing histories for energy products. The team will also follow the subjects’ activities over the coming year to see if and why customers buy additional products and services and whether their purchases are made with cash or through the use of financing mechanisms like pay-as-you-go enabled by mobile money or loans from microfinance institutions.
“The off-grid solar sector is growing rapidly in East Africa, with millions more people benefitting from increased energy access every year,” Prof. Jacobson explains. “While this is promising, off-grid solar technologies hold even greater promise if creative efforts can increase access to larger systems. Research that collectively helps us understand the factors that influence how and why people adopt off-grid solar products is needed to realize the full potential of the technology, and we are grateful to be working with UNCDF on this important effort.”
The research initiative is jointly managed by UNCDF’s CleanStart Programme and Kat Harrison, Associate Director of Impact at Acumen, and is supported by the Global Off-Grid Lighting Association and GSMA.