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Demand for Off-Grid Solar Electricity: Experimental Evidence from RwandaDecember 2016 Schaumburg-Lippe-Straße 5-9 53113 Bonn, GermanyPhone: +49-228-3894-0 Email: publications@iza.org www.iza.org
IZA -Institute of Labor Economics
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IZA DP No. 10427
Demand for Off-Grid Solar Electricity: Experimental Evidence from RwandaDecember 2016
Michael Grimm
University of Passau, Erasmus University Rotterdam and IZA
Luciane Lenz
RWI
Jörg Peters
RWI and AMERU, University of the Witwatersrand
Maximiliane Sievert
RWI
AbstrActIZA DP No. 10427 December 2016Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda* Providing electricity to the unconnected 1.1 billion people in developing countries is one of the top political priorities of the international community, yet the costs of reaching this objective are very high. The present paper examines whether the objective and the associated costs are justified by the value that target beneficiaries assign to electricity.We provide experimental evidence on the revealed willingness-to-pay (WTP) for three types of off-grid solar electricity devices. Our findings show that households are willing to dedicate a substantial part of their expenditures to electricity. In absolute terms, though, the WTP does not suffice to reach cost-covering prices. Different payment schemes, which we randomized across our sample, do not alter the WTP significantly. If universal electricity access is to be achieved, direct...