J.R. Siegel and Atiq Rahman
Energy, Climate, and Innovation Discussion Paper
What was the key reason for the exponential growth of the off-grid solar home system sector in rural Bangladesh?
Should more subsidies be offered to bridge the gap between non-owners' willingness to pay and overall solar home system costs?
This paper analyzes the process of how more than 650,000 rural households in Bangladesh decided to purchase a solar home system (SHS) in last 14 years. Based on a combination of interviews and an examination of households, the study highlights the role of opinion leaders in SHS diffusion and suggests that word of mouth was the key driver in knowledge dissemination and sales growth. It also points out that the gap between SHS costs and the willingness of consumers to pay is much larger than the subsidies currently being offered. This study provides useful insights for policymakers interested in extending energy services to the more than 1.5 billion people who still live off the grid around the globe.
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Read a related paper recently published by UNRISD and co-authored by Siegel.