Constraints of Electricity Mini Off-Grid Systems Diffusion for Entrepreneurship in Rural Areas of Zambia

Abstract

The low electrification rate of about 52% and an estimated 28% for Africa and Zambia respectively is of concern. There is now a common consensus that renewable energy electricity mini off-grid systems (or simply mini-grids) have a great role to play to reverse the trend especially in remote rural areas that are located farthest from respective national main grids in order to achieve the United Nations Sustainable Development Goal Number 7 which specifically challenges for universal access to sustainable energy by 2030. This study sought to establish the constraints of diffusion for mini-grids intended for entrepreneurial purposes in rural areas of Zambia. The embedded research design; where quantitative data was collected and analysed then followed by collection and analysis of qualitative data was employed for this study. The exponential discriminative snowball sampling technique was used to collect data from a sample of 37 respondents. Likert scales were used to analyse quantitative data in combination with the coefficient of variance and the degree of consensus, while thematic analysis was used to analyse qualitative data. The study established the following constraints of diffusion of mini-grids for entrepreneurial purposes in rural areas of Zambia: high poverty levels, low population density, low profitability of the mini-grids business, substitutes products provide cheap energy sources, fear of the main grid encroachment, high upfront capital expenditure required for setting up the mini-grids business, local taxes, seasonality of business, lack of access to capital finance and limited business ideas, government policy and regulations, ignorance about existence of mini-grids and their benefits, lack of incentives such as capital subsidies, business environment varies depending on speci?c locations and challenging physical geographical conditions. The study conclusively found that; consumer sensitization, the marketing concept and referral marketing are the most effective strategies for promoting diffusion for mini-grids in rural areas of Zambia, supported by the declining costs for renewable energy technologies on the market. The study recommended that sensitization should be intensified since communities respond positively whenever enlightened about the existence of mini grids and their benefits for entrepreneurial purposes. Further, the catchment area for customers deriving benefit from a particular mini-grid should be wide enough by installing mini-grids well far apart to allow attainment of sales critical mass in view of low population density and low profitability in rural areas of Zambia.