Can solar panels leapfrog power grids? The World Bank experience 1992-2009

Solar photovoltaic systems promise both rural access to electricity and reduction in greenhouse gas emissions. During 1992-2009, the World Bank contributed US$790 million to promote the uptake of off-grid solar home systems in 34 developing countries. This paper reviews the experience of the World Bank involvement in the rural solar photovoltaic market and draws lessons learned. The review finds that World Bank efforts, using quality-contingent producer subsidies and relying on microfinance for consumers, have been effective in stimulating the diffusion of the solar technology although the impact on greenhouse gas reductions is rather limited because of limited energy consumption of off-grid households.