Using solar panels for business purposes: Evidence based on high-frequency power usage data

Access to electricity is typically the main benefit associated with solar panels, but in economically less developed countries, where access to electricity is still very limited, solar panel systems can also serve as means to generate additional income and to diversify income sources. We analyze hig...

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Autores principales:	Christoph Weisser, Friederike Lenel, Yao Lu, Krisztina Kis-Katos, Thomas Kneib
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Rural electrification Off-grid energy High-frequency electricity usage data Solar panels Tanzania Risk management Electrical engineering. Electronics. Nuclear engineering TK1-9971 Economic growth, development, planning HD72-88
Acceso en línea:	https://doaj.org/article/1a600ddcf1434e25b36db2fb5551ee77
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id	oai:doaj.org-article:1a600ddcf1434e25b36db2fb5551ee77
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spelling	oai:doaj.org-article:1a600ddcf1434e25b36db2fb5551ee772021-11-20T05:07:28ZUsing solar panels for business purposes: Evidence based on high-frequency power usage data2352-728510.1016/j.deveng.2021.100074https://doaj.org/article/1a600ddcf1434e25b36db2fb5551ee772021-01-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S2352728521000166https://doaj.org/toc/2352-7285Access to electricity is typically the main benefit associated with solar panels, but in economically less developed countries, where access to electricity is still very limited, solar panel systems can also serve as means to generate additional income and to diversify income sources. We analyze high-frequency electricity usage and repayment data of around 70,000 households in Tanzania that purchased a solar panel system on credit, in order to (1) determine the extent to which solar panel systems are used for income generation, and (2) explore the link between the usage of the solar system for business purposes and the repayment of the customer credit that finances its purchase. Based on individual patterns of energy consumption within each day, we use XGBoost as a supervised machine learning model combined with labels from a customer survey on business usage to generate out-of-sample predictions of the daily likelihood that customers operate a business. We find a low average predicted business probability; yet there is considerable variation across households and over time. While the majority of households are predicted to use their system primarily for private consumption, our findings suggest that a substantial proportion uses it for income generation purposes occasionally. Our subsequent statistical analysis regresses the occurrence of individual credit delinquency within each month on the monthly average predicted probability of business-like electricity usage, relying on a time-dependent proportional hazards model. Our results show that customers with more business-like electricity usage patterns are significantly less likely to face repayment difficulties, suggesting that using the system to generate additional income can help to alleviate cash constraints and prevent default.Christoph WeisserFriederike LenelYao LuKrisztina Kis-KatosThomas KneibElsevierarticleRural electrificationOff-grid energyHigh-frequency electricity usage dataSolar panelsTanzaniaRisk managementElectrical engineering. Electronics. Nuclear engineeringTK1-9971Economic growth, development, planningHD72-88ENDevelopment Engineering, Vol 6, Iss , Pp 100074- (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Rural electrification Off-grid energy High-frequency electricity usage data Solar panels Tanzania Risk management Electrical engineering. Electronics. Nuclear engineering TK1-9971 Economic growth, development, planning HD72-88
spellingShingle	Rural electrification Off-grid energy High-frequency electricity usage data Solar panels Tanzania Risk management Electrical engineering. Electronics. Nuclear engineering TK1-9971 Economic growth, development, planning HD72-88 Christoph Weisser Friederike Lenel Yao Lu Krisztina Kis-Katos Thomas Kneib Using solar panels for business purposes: Evidence based on high-frequency power usage data
description	Access to electricity is typically the main benefit associated with solar panels, but in economically less developed countries, where access to electricity is still very limited, solar panel systems can also serve as means to generate additional income and to diversify income sources. We analyze high-frequency electricity usage and repayment data of around 70,000 households in Tanzania that purchased a solar panel system on credit, in order to (1) determine the extent to which solar panel systems are used for income generation, and (2) explore the link between the usage of the solar system for business purposes and the repayment of the customer credit that finances its purchase. Based on individual patterns of energy consumption within each day, we use XGBoost as a supervised machine learning model combined with labels from a customer survey on business usage to generate out-of-sample predictions of the daily likelihood that customers operate a business. We find a low average predicted business probability; yet there is considerable variation across households and over time. While the majority of households are predicted to use their system primarily for private consumption, our findings suggest that a substantial proportion uses it for income generation purposes occasionally. Our subsequent statistical analysis regresses the occurrence of individual credit delinquency within each month on the monthly average predicted probability of business-like electricity usage, relying on a time-dependent proportional hazards model. Our results show that customers with more business-like electricity usage patterns are significantly less likely to face repayment difficulties, suggesting that using the system to generate additional income can help to alleviate cash constraints and prevent default.
format	article
author	Christoph Weisser Friederike Lenel Yao Lu Krisztina Kis-Katos Thomas Kneib
author_facet	Christoph Weisser Friederike Lenel Yao Lu Krisztina Kis-Katos Thomas Kneib
author_sort	Christoph Weisser
title	Using solar panels for business purposes: Evidence based on high-frequency power usage data
title_short	Using solar panels for business purposes: Evidence based on high-frequency power usage data
title_full	Using solar panels for business purposes: Evidence based on high-frequency power usage data
title_fullStr	Using solar panels for business purposes: Evidence based on high-frequency power usage data
title_full_unstemmed	Using solar panels for business purposes: Evidence based on high-frequency power usage data
title_sort	using solar panels for business purposes: evidence based on high-frequency power usage data
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/1a600ddcf1434e25b36db2fb5551ee77
work_keys_str_mv	AT christophweisser usingsolarpanelsforbusinesspurposesevidencebasedonhighfrequencypowerusagedata AT friederikelenel usingsolarpanelsforbusinesspurposesevidencebasedonhighfrequencypowerusagedata AT yaolu usingsolarpanelsforbusinesspurposesevidencebasedonhighfrequencypowerusagedata AT krisztinakiskatos usingsolarpanelsforbusinesspurposesevidencebasedonhighfrequencypowerusagedata AT thomaskneib usingsolarpanelsforbusinesspurposesevidencebasedonhighfrequencypowerusagedata
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Using solar panels for business purposes: Evidence based on high-frequency power usage data

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