Skip to content
← All work

CrossBoundary Mini-Grid Innovation Lab · January 2023

Which appliances actually grow mini-grid demand?

A multi-year field experiment across 25 mini-grid sites in Kenya, Nigeria and Tanzania testing whether appliance financing raises electricity consumption. Productive-use appliances did; household appliances didn't.

consumption per user with productive-use financing
+48%
consumption per user with productive-use financing
consumption of top-20% productive users vs peers
16×
consumption of top-20% productive users vs peers
connections across 25 sites
12,000+
connections across 25 sites
AnalyticsEnergyFinance

Mini-grids live or die on demand. Their costs are largely fixed, so the more electricity each customer uses, the better the economics. A popular idea is to finance appliances for customers, on the theory that more appliances means more consumption. But which appliances?

The CrossBoundary Mini-Grid Innovation Lab tested this over three phases, working with 10+ developers across 25 sites and more than 12,000 connections in Kenya, Nigeria and Tanzania. I worked on the study as Associate Principal for Data.

  • Phase 1.0 financed household appliances such as TVs, fridges and speakers.
  • Phase 2.0 financed productive-use appliances such as grain mills and welders.
  • Phase 3.0 focused on energy-efficient productive-use appliances.

The result

Average consumption per user (ACPU) moved in opposite directions depending on what was financed.

FIG 01Effect on average consumption per user, by type of appliance financing
0Productive-use appliancessites offering financing+48%Household appliances, East AfricaPhase 1.0−3%Household appliances, West AfricaPhase 1.0−13%

Source: CrossBoundary Mini-Grid Innovation Lab, Appliance Financing 1.0–3.0

Financing household appliances did not raise consumption; it fell slightly. Sites offering productive-use appliance financing saw ACPU 48% higher. The gains were also highly concentrated: the top fifth of productive-use customers consumed 16 times more than their peers.

What it showed

The lesson for developers is to target financing at income-generating uses of power, because those are what grow demand. It also matters who you finance, since a small group of productive users drives most of the uplift. The approach is now being scaled through a consortium-led roadshow, starting in Ethiopia.

The analytical work

Field experiments on live infrastructure are messy. Sites differ, customers self-select into financing, and seasonality can swamp small effects. Separating the effect of financing from everything else called for regression, propensity-score matching and random-forest models on customer consumption data.