What If We Gave The World Solar Mini-Grids, And The World Didn't Want Them

Villagers walk past solar panels mounted on the roof of a building, part of a solar power microgrid,… [+] in the village of Dharnai in Jehanabad, Bihar, India, on Thursday, July 9, 2015. While Prime Minister Narendra Modi's ambition has led billionaires such as Foxconn Technology Group's Terry Gou to pledge investment, the question remains whether the 750 million Indians living on less than $2 per day can afford or will embrace green energy. Photographer: Prashanth Vishwanathan/Bloomberg
It's a popular idea in the energy and climate-change crowd: developing countries can leapfrog the kind of sprawling electrical grid we have in the United States, with its centralized power plants, and go directly to a future in which homes and businesses generate clean electricity from the sun and share it over mini-grids.
Many developing countries leapfrogged the old wired telephone system, after all, and went straight to cellular phones.
But some researchers are discovering that may not be what the developing world wants.
"What we learned over time is that people don’t like the solar panels very much," University of Chicago economist Michael Greenstone said at the Aspen Ideas Festival. "The sun doesn’t shine all the time. The batteries that are associated with them catch fire and all kinds of nasty things."
Greenstone has been involved for several years with research into demand for solar minigrids in Bihar, India, an impoverished state of 100 million people, where only 5 percent of homes had access to grid electricity. Rural homes rely on cooking stoves and kerosene lamps, which count lung disease among their dangers.
Southwest of Bihar, the state of Maharashtra supplied rural villagers with solar equipment in 2012, but many of those arrays have fallen into disrepair, Bloomberg reported earlier this year. Would a program in Bihar fare better if villagers were asked to pay for access to the solar equipment?
Greenstone's team, which included researchers from Yale, Harvard and the London School of Economics, set out to find a price point at which people were willing to pay for the solar equipment. If the government subsidized solar mini-grads to bring them down to that price, they wanted to know, would people buy in?
"Almost all the demand for this evaporated," Greenstone said. "At the prices that reflect the cost of supplying, there's almost no demand, and if you subsidize down to the price where most businesses could enter, you’re down to about nine percent."
So the researchers asked people why they weren't interested:
"The answer is, 'We want real electricity. We want the grid,'" Greenstone said. "That raises the question of how are we going to bring the grid to developing countries and how are they going to develop it for themselves."
Read More: How Markets Beat Other Policies At Tackling The Energy-Climate Change Problem

Tip Jar: If you found value on this page, please consider tipping the author.