Determinants of willingness to pay (WTP) among energy poor households: implications for energy poverty frameworks and planning models

Electrification rates in low income countries have faced steady improvements in the last few decades, with impressive technological advancements in both the grid and off-grid sectors.  Nonetheless, large-scale demand and supply-side challenges of electricity access and reliability persist through Asia and sub-Saharan Africa, putting into question the feasibility of universal electricity access by 2030. I combine survey data from eight states in India to conduct a descriptive analysis of socioeconomic, behavioral, and technical factors that correlate with variations in household valuation of electricity access and reliability in urban and rural municipalities. The aim of this paper is not to provide causal evidence, but rather insights into which potential factors explain energy poor households’ decision-making and WTP for a spectrum of electricity services. Recommendations are provided on the ways that these insights can both further expand how energy poverty is measured within general access frameworks, as well as in optimization tools for national electrification planning through use of proxy metrics, including the cost of nonserved energy.

By: Roxanne Rahnama

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