Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay

Renewable energy minigrids hold significant prospects for Africa’s energy sector and its economic development in general. The government of Ghana has established pilot renewable minigrids in five off-grid communities as a testing ground for the electrification of over 600 existing rural communities...

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Autores principales:	Artem Korzhenevych, Charles Kofi Owusu
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	willingness to pay minigrids rural electrification renewable energy Ghana Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/00cfb80478114b33b18ad5cf1d83816c
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spelling	oai:doaj.org-article:00cfb80478114b33b18ad5cf1d83816c2021-11-11T19:26:17ZRenewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay10.3390/su1321117112071-1050https://doaj.org/article/00cfb80478114b33b18ad5cf1d83816c2021-10-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/11711https://doaj.org/toc/2071-1050Renewable energy minigrids hold significant prospects for Africa’s energy sector and its economic development in general. The government of Ghana has established pilot renewable minigrids in five off-grid communities as a testing ground for the electrification of over 600 existing rural communities that cannot be electrified via the national grid. Although there is evidence on willingness to pay (WTP) values for renewable-generated electricity in some developing countries, little is known about households’ WTP for renewable-based electricity in Ghana and, in particular, about renewable minigrids for rural electrification. This paper provides one of the first WTP estimates for renewable-based electricity for rural electrification in a developing economy context such as Ghana. Using data from a contingent valuation survey undertaken in all five pilot renewable minigrid project communities, we found that rural households are willing to pay an average of 30 GHC/month (≈5 USD/month) for high-quality renewable-powered electricity services, which is twice the amount they are currently paying based on the Uniform National Tariffs. The hypothetical bias is addressed by conducting a survey among active users of the minigrids. The starting point bias is reduced by employing random starting bids. The respondents are willing to pay between 9 and 11% of their discretionary incomes to cover the cost of accessing reliable renewable-powered electricity in the rural, off-grid communities in Ghana. The paper concludes by discussing the policy implications of these findings regarding the development of tariff regulations and business models for renewable minigrids in the rural, off-grid sector.Artem KorzhenevychCharles Kofi OwusuMDPI AGarticlewillingness to payminigridsrural electrificationrenewable energyGhanaEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 11711, p 11711 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	willingness to pay minigrids rural electrification renewable energy Ghana Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	willingness to pay minigrids rural electrification renewable energy Ghana Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Artem Korzhenevych Charles Kofi Owusu Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay
description	Renewable energy minigrids hold significant prospects for Africa’s energy sector and its economic development in general. The government of Ghana has established pilot renewable minigrids in five off-grid communities as a testing ground for the electrification of over 600 existing rural communities that cannot be electrified via the national grid. Although there is evidence on willingness to pay (WTP) values for renewable-generated electricity in some developing countries, little is known about households’ WTP for renewable-based electricity in Ghana and, in particular, about renewable minigrids for rural electrification. This paper provides one of the first WTP estimates for renewable-based electricity for rural electrification in a developing economy context such as Ghana. Using data from a contingent valuation survey undertaken in all five pilot renewable minigrid project communities, we found that rural households are willing to pay an average of 30 GHC/month (≈5 USD/month) for high-quality renewable-powered electricity services, which is twice the amount they are currently paying based on the Uniform National Tariffs. The hypothetical bias is addressed by conducting a survey among active users of the minigrids. The starting point bias is reduced by employing random starting bids. The respondents are willing to pay between 9 and 11% of their discretionary incomes to cover the cost of accessing reliable renewable-powered electricity in the rural, off-grid communities in Ghana. The paper concludes by discussing the policy implications of these findings regarding the development of tariff regulations and business models for renewable minigrids in the rural, off-grid sector.
format	article
author	Artem Korzhenevych Charles Kofi Owusu
author_facet	Artem Korzhenevych Charles Kofi Owusu
author_sort	Artem Korzhenevych
title	Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay
title_short	Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay
title_full	Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay
title_fullStr	Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay
title_full_unstemmed	Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay
title_sort	renewable minigrid electrification in off-grid rural ghana: exploring households willingness to pay
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/00cfb80478114b33b18ad5cf1d83816c
work_keys_str_mv	AT artemkorzhenevych renewableminigridelectrificationinoffgridruralghanaexploringhouseholdswillingnesstopay AT charleskofiowusu renewableminigridelectrificationinoffgridruralghanaexploringhouseholdswillingnesstopay
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Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay

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