Determinants of household use of energy-efficient and renewable energy technologies in rural Ethiopia

Abstract

The poor households living in low-income countries depend on traditional sources for basic energy service; which has a broader socio-economic and environmental adverse effect. To mitigate the problem policy measures were used to increase access to energy-efficient and renewable energy technology. However, there are few studies on demand-side particularly on the drivers of household joint technology adoption behavior. Against this backdrop, this paper examined the determinants of household behavior concerning the adoption decision of energy-efficient and renewable energy technology using cross-sectional data collected from 195 households in central Ethiopia. For identification, the generalized ordered probit model which is a more flexible discrete choice model was applied. The findings reveal that the richer the households, the more likely that they adopt both improved cookstoves and renewable energy technology because of the greater financial capacity to afford to pay the upfront cost of the technologies. Household size and assets such as landholding size and the number of cattle owned positively associated with the use of both technologies. Likewise, a high level of education attained by the head of the household likely reduces the likelihood of adoption of neither technology but increases the likelihood of adoption of renewable energy. Participation in off-farm income-earning activities likely increases the propensity to invest in renewable energy. Similarly, household membership in local cooperatives found to increase the propensity to invest in renewable energy technology. While access to credit found to increase the adoption of energy-efficient technology. The finding of this study implies that poverty reduction and education policies increase the propensity to invest in energy-efficient and renewable energy technology. Likewise, better access to credit, off-farm employment opportunities, and cooperatives are also important.