Are micro-benefits negligible? The implications of the rapid expansion of Solar Home Systems (SHS) in rural Bangladesh for sustainable development

This paper examines the multiple benefits of the adoption of Solar Home Systems (SHS) and discusses the dissemination potential for sustainable rural livelihoods in developing countries. Based on a household survey conducted in rural Bangladesh, we first identify the impact of SHS on the reduction in energy costs and compare purchasing costs. We then examine household lifestyle changes following the adoption of SHS. Finally, we consider several price-reduction scenarios to examine the potential demand for SHS and to evaluate its future dissemination potential. The results of the analysis indicate that households with SHS successfully reduce their consumption of kerosene and dependency on rechargeable batteries, with the cost reductions accounting for some 20–30% of monthly expenditures on SHS. Moreover, most households with SHS can enjoy its benefits, including electric lighting, watching television, and the ease of mobile phone recharging at home. Further, the price reduction can make possible potential demand in more than 60% of households without SHS, while additional price reductions promote the purchase of even larger SHS packages. This study concludes that even though the scale of single SHS is small, the micro-benefits for each household and the dissemination potential are substantial.

Research Highlights
► Price reductions on Solar Home Systems potentially generate demand.
► Solar Home Systems enable a reduction in energy costs and improvements in lifestyle.
► The micro-benefits for households and the dissemination potential are substantial.