Purchasing power: Examining customer profiles and patterns for decentralized electricity systems in East Africa

Abstract

Off-grid electricity systems have burgeoned across Africa recently, extending electricity access to rural communities. With the accelerated adoption of mini-grids and solar home systems, it is becoming increasingly important to understand how their customer bases consume and spend on electricity. Using a novel data set of hourly electricity consumption and electricity expenditures of about 13,000 solar home system customers in Kenya in 2018 and 2,000 mini-grid customers in Tanzania in 2017, we present a relative examination of the electricity consumption behavior and spending patterns among mini-grid and solar home system customers. Our analysis shows that, on average, mini-grid customers spend substantially less on electricity than solar home system customers and make smaller, more frequent payments during the month. We also find that higher monthly spending among mini-grid customers correlates with off-peak consumption and a higher load factor, contrary to the behavior of solar home system customers. Our results suggest the need for policies that encourage the growth of productive uses of energy that are innovative, diverse, and daytime-oriented to ensure sustainable mini-grid operation, as well as policies that establish a larger market for solar home system-compatible electric appliances that incentivize solar home system customers to increase utilization of their systems.