Diksha Bijlani earned her MPP from HKS in 2020, with a focus on behavioral science. She currently works at the World Bank with the behavioral science team and the climate change team, working on uptake of clean energy technology and inclusive local stakeholder engagement in climate finance. At HKS, Diksha was the social and outreach chair for the Behavioral Insights Student Group. She was also a Teaching Fellow for negotiations courses at HKS; a grant recipient of the Program for Negotiation at Harvard Law School; and a grant recipient of the Women and Public Policy Program. Diksha is from India, a graduate in Applied Psychology from University of Delhi, and has worked in the Indian Parliament prior to coming to HKS. She is also a spoken word poet, and believes in the power of stories to change the world. Find Diksha on LinkedIn.

PAE: A Solar Panel Can Change A Life: Behavioral Interventions for Increasing Adoption of Solar Lighting in Off-Grid Ethiopia | Client: World Bank

To support market penetration and affordability of off-grid products, the World Bank’s Ethiopia Off-Grid Renewable Energy Program has been providing working capital to solar importers and micro-finance institutions since 2013, to increase supply of solar lighting products in the market and provide consumer financing for their purchase. In addition, to increase consumer confidence in the product, the program has a warranty tracking and enforcement mechanism as well as a carbon credit for battery replacement. However, only 1.2 million solar products have been distributed until the end of 2019, far from the program’s target of 2.8 million solar lanterns and 214,850 solar home systems distributed until 2020.

Hence, despite financing, distribution remains below targets due to various behavioral barriers that must still be overcome before the market can be expanded to make a real impact on energy access in the poorest communities. This diagnostic note aims to identify the behavioral barriers inhibiting uptake of solar lighting technology in off-grid households in Ethiopia and recommends interventions to minimize these barriers.

Barriers: Two major factors cause low uptake, each with several underlying behavioral barriers.

1. Inability to pay upfront costs: Households are unable to pay upfront costs due to financing barriers (credit aversion or non-monetary costs to getting credit), under-saving due to present bias, and limited cognitive bandwidth to assess savings needed today or value savings accruing tomorrow
2. Poor product awareness: Households have poor awareness of the price, warranty and benefits of the product due to lack of centralized information sources leading to information asymmetry, and complicated program benefits.

Recommendations: These behavioral barriers can be targeted by several interventions.

• “Solar Box” or “Solar Fund”: small savings earmarked for solar product made at home or with MFIs (to address present bias)
• “Solar Day”: fair at village center with warranty/info stand, option to apply for loan or purchase product directly, and anecdotes from solar adopters on how to save (to address limited bandwidth and information asymmetry)
• “Away From Kerosene, Ahead With Solar”: nationwide consumer awareness campaign (to address complicated program benefits and limited bandwidth)
• “Solar Hotline”: centralized telephone line for obtaining warranty information and sending battery replacement reminders (to address information asymmetry and complicated program benefits)
• “Solar Kiosks” and Demonstrations: kiosks selling solar products at village center and demonstrations at village level allowing consumers no-cost experimentation (to address limited bandwidth and non-monetary costs)
• Making private sector entrepreneurial: capacity building of private sector to utilise more creative, behaviorally informed marketing strategies and targeting for demand generation (to address limited bandwidth and present bias)