Governments in low-income countries are increasingly integrating off-grid electricity provision into national electrification strategies, creating novel, decentralized markets for electricity. I study a highly decentralized product that plays an important role in energy access: pay as you go (PAYGo) solar home systems. Unlike grid electrification, PAYGo solar features low upfront costs but relatively high usage costs. To what extent are high intensive margin prices limiting the adoption of solar home systems? In 2019, the Togolese government implemented a large subsidy reducing usage costs by 17.8%-41.7%, while upfront costs remained constant. I estimate that the subsidy dramatically increased adoption, with the largest effects occurring for the smallest systems (240% increase). I go on to develop a theoretical framework that shows that the effects of such subsidies are uncertain due to the unique cost structure of decentralized solar electricity. My results highlight the importance of use prices in the electrification decisions of low-income households.
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Reproducible Research Repository (World Bank) | https://reproducibility.worldbank.org |
Paper exhibits were reproduced on a computer with the following specifications:
• OS: Windows 10 Enterprise, version 22H2
• Processor: Intel(R) Xeon(R) Gold 6132 CPU @ 2.60GHz 2.60 GHz (2 processors)
• Memory available: 128 GB
• Software version: R 4.3.2
~ 30 minutes
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Megan Lang | World Bank | mlang@worldbank.org |
2025-01
Location | Code |
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Togo | TGO |
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/the World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
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Modified BSD3 | https://opensource.org/license/bsd-3-clause/ |
Name | Affiliation | |
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Megan Lang | World Bank | mlang@worldbank.org |
Reproducibility WBG | World Bank | reproducibility@worldbank.org |
Name | Abbreviation | Affiliation | Role |
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Reproducibility WBG | DIME | World Bank - Development Impact Department | Verification and preparation of metadata |
2025-01-28
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