The Soccket – created by a US-based NGO and distributed around the developing world – allows kids to play soccer during the day and then use the kinetic energy from their balls to power a reading lamp at night. Seems great – helps kids study even if they don’t have electricity in their homes.
To the Soccket entrepreneur’s dismay, NPR’s story pointed out that the devices weren’t robust. The reporter also interviewed a woman whose grandson had been given a Socket, noting that, “for the $60 it cost a charity to provide her family with one Soccket ball, she said she could have had her home hooked up to the electric grid, and that could have provided light for her whole family for years to come.” While her home didn’t have electricity, the grid had already come to her village.
The debates about the Soccket are representative of broader discussions about the best ways to bring electricity to the more than one billion people in the world who live without it: Lots of good intentions, but very little data that could help inform decisions about how to best increase energy access.
The current discussions about energy access tend to focus on two mechanisms: grid extensions and off-grid solutions, like solar home systems, village-level microgrids or even the Soccket. Sometimes these approaches are pitted against one another.
For example, debates between the Breakthrough Institute and Sierra Club have gotten heated. The Sierra Club sees huge potential for growth in off-grid solutions, like solar home systems. They recently put out a report containing the graph below, which depicts the amount of money for grid extensions dwindling while spending on minigrids and solar home systems (SHS) expands.
The Breakthrough Institute is critical of the report, and notes that solar home systems and similar devices are, “a vision of, at best, charity for the world’s poor, not the kind of economic development that results in longer lives, higher standards of living, and stronger and more inclusive socioeconomic institutions.”
Recent data that several colleagues and I have collected in Western Kenya suggest that the distinction between on-grid and off-grid may be too stark. As part of a larger project, we geo-coded over 20,000 structures and noted whether or not they were electrified. Very few of them were: only 5% of the homes and 22% of the businesses.
Here’s the surprising thing, though. All of these structures were within 600 meters of existing transformers. A full half of the unconnected homes were within 200 meters of an existing connection. We are calling these homes and businesses “under-grid” as they’re not on the grid but “off grid” just doesn’t capture their proximity to the existing grid infrastructure.
How can this happen? We have several hypotheses that we’re testing rigorously in on-going work. One notable fact is that households must pay over $400 for a connection, a very high sum in a country where average per capita incomes are around $1700. Kenya Power and Light Company claims that its average cost of establishing a new connection is even higher and appears uninterested in lowering the connection charge.
We suspect that there’s a virtuous cycle to take advantage of, though. If KPLC lowered the charge or even offered households a way to finance the charge, paying back the fixed costs over time, more households would likely connect. In turn, with a greater density of new connections, the average cost per connection is likely to be lower.
How representative is the situation in Western Kenya? To really answer that, we need to collect more hard data about electricity demand and supply around the developing world. The Soccket is clever, but donors interested in helping kids study at night should know that there may be cheaper ways to achieve that goal.
While we are collecting more data, though, I would like to see the term “under-grid” introduced into the debate. Rhetoric can matter, especially in the absence of hard facts. Often, people on both sides of the solar-versus-grid-extensions debate talk about waiting for the grid to “reach” households. Even the term “extensions” suggests a technological challenge, but our results in Kenya suggest that economics – getting the connection charges right – may be the crucial barrier.
There is one aspect of the Kenyan experience that is likely to have general resonance. The country embarked on a massive grid extension program in 2006 focused on electrifying all the schools in the country. Similar ambitions in other countries will bring the grid close to most people. And, after all, while having electricity in your home is one important measure of development, electrified schools and health centers, which are usually close to where people live, are also important.
The cover of the Sierra Club report is pictured below. The man seems proud of his solar home system, which I suspect is why the Sierra Club chose the picture. Note that in the background of the picture, and presumably close to the solar owners’ home, there are grid electricity lines. In many parts of the developing world, those lines could carry electricity from large- scale renewable resources, so the grid does not have to be synonymous with dirty fossil-fuel power.
Achieving energy access for the billion-plus people without pillaging the climate will be one of the toughest challenges of our time. As we do that, it’s important to make decisions with the best possible information.
Catherine Wolfram is the Cora Jane Flood Professor of Business Administration at the Haas School of Business, University of California, Berkeley. During Academic year 2018-19, she will serve as the Acting Associate Dean for Academic Affairs at Berkeley Haas. She is the Program Director of the National Bureau of Economic Research's Environment and Energy Economics Program, Faculty Director of The E2e Project, a research organization focused on energy efficiency and a research affiliate at the Energy Institute at Haas. She is also an affiliated faculty member of in the Agriculture and Resource Economics department and the Energy and Resources Group at Berkeley.
Wolfram has published extensively on the economics of energy markets. Her work has analyzed rural electrification programs in the developing world, energy efficiency programs in the US, the effects of environmental regulation on energy markets and the impact of privatization and restructuring in the US and UK. She is currently implementing several randomized controlled trials to evaluate energy programs in the U.S., Ghana, and Kenya.
She received a PhD in Economics from MIT in 1996 and an AB from Harvard in 1989. Before joining the faculty at UC Berkeley, she was an Assistant Professor of Economics at Harvard.