Opportunities for Productive Uses of Electricity in the Off-Grid Market

Increased demand for productive uses of energy is a driver of energy consumption. Low-income households in the off-grid market have a budget constraint. By understanding the energy priorities of low-income households in the off-grid market, utilities can develop innovative solutions for servicing the market. This paper builds on recent literature on productive uses of electricity for increased investment and pay back for micro-grid investment across the eight productive user categories that were developed in Rwanda. We ask: how can the range, success, and benefits of productive uses of energy be expanded in resource-constrained settings? To answer the research question, we address the need for supporting infrastructure of business development services, energy services bundling, and utility policy instruments that support productive use of energy. We created metrics for prioritizing productive uses of energy in the off-grid market. In the face of a budget constraint, low-income households that prioritize domestic over business and services uses of energy need integrated services that support the consumptive-productive-service link. Realistic cost-benefit analyses are needed. Solar irrigation as a small industry case in Rwanda can achieve at best a 3-year payback period if it can increase productivity by 54%. We offer recommendations to increase energy demand from productive uses of energy in the off-grid market: work with local cultural norms to support business development; develop realistic cost-benefit analyses based on local data, and partner with business training service providers.