Using a choice experiment to understand preferences in off-grid solar electricity attributes: The case of Nigerian households

Abstract

One of the pressing challenges to economic development in sub-Saharan Africa (SSA) is access to electrical power. In Nigeria, there is a large gap in electricity access between rural and urban areas; only about 40% have access in rural areas as compared to almost 60% in urban areas. A potential solution is the use of off-grid solar electricity to meet their needs. This article seeks to assess the tradeoffs involved in using off-grid solar electricity from the perspective of Nigerian households. Given their generally low income levels, the research focuses on the lower end of the market for off-grid solar electricity: solar chargers. It uses choice experiments to measure households' preferences for solar electricity by exploring attributes rural households are looking for in solar chargers. The relationship between households' preferences and off-grid solar electricity was analyzed using a random parameter logit model. Findings indicate that confidence in the quality of the product was the most important variable, and that respondents associated higher priced solar chargers with higher quality. These findings suggest that energy companies making off-grid electricity technology could consider offering warrantees for high-quality products in order to build consumers' trust.