Do determinants of adopting solar home systems differ between households and micro-enterprises? Evidence from rural Bangladesh

Abstract

Abstract Solar home systems are recognized as a promising technology to mitigate energy poverty, promote renewable energy, and achieve Goal 7 of the United Nations Sustainable Development Goals by 2030. This study examines the determinants of solar home system adoption, with a focus on similarities and differences between households and micro-enterprises. Our original data, collected in rural off-grid villages in southern Bangladesh, reveal that households prefer relatively higher generation capacities for multiple purposes, while micro-enterprises prefer lower ones mainly for nighttime lighting. We confirm positive effects of higher economic status and negative effects of the existence of a smoker on solar home system adoption, which is similar for both households and micro-enterprises. On the other hand, households and micro-enterprises are different in two respects: (1) micro-enterprises are more likely to respond to unit prices of other alternative energy sources than households are and (2) households are more sensitive to prospects of grid expansion in the near future than micro-enterprises are. These findings imply that to progress the government’s goal of electrification for all by 2021, there are more effective ways for further promotion of solar home systems by distinguishing between the approaches to marketing for households and micro-enterprises.