Solar Lantern Program: Sensitization and Willingness to Pay by Rural Households in Ghana

Context

One of the major threats to achieving Sustainable Development Goal Seven (“ensure access to affordable, reliable, sustainable and modern energy for all by 2030”) is the lack of access to, availability, and affordability of clean energy options by many low-and middle-income countries. In 2022, about 43 percent of the population in Africa lacked access to electricity. In Ghana, 27 percent of rural and poor households don’t have electricity, five times higher than rates in urban areas. Ghana’s Ministry of Energy implemented the Solar Lantern Promotion Program (SLPP) as a pre-electrification intervention in off-grid communities. The SLPP subsidizes solar powered lanterns, which are brighter and more robust than kerosene lamps. The main barriers to adoption are lack of knowledge on the benefits of solar lanterns and the higher upfront costs.

Study Design

This randomized evaluation assesses the willingness to pay (WTP) of SLPP target beneficiaries and how WTP changes with health and financial education, as well as flexible payment options. Two randomly assigned groups are asked for their WTP after: (i) receiving only educational information or (ii) receiving both information and a weekly installment payment option. WTP will be elicited using the Becker-DeGroot-Marschak (BDM) bidding mechanism through household surveys. The BDM technique asks each participant to state the price they would be willing to pay for the solar lantern. The researchers then draw a price between zero and fifty Ghana cedis. If the drawn price is less than or equal to the stated price, the participant can purchase the lantern at the drawn price. If the drawn price is more than the stated price, the participant will not be able to purchase the lantern in the survey.

Results & Policy Lessons

This research is expected to inform SLPP’s pricing decision and the design of effective sensitization campaigns to encourage adoption. Results forthcoming.