This paper explores the future of solar microgrids, as well as potential supporting government policies and structures, by analyzing rural consumers’ willingness to pay for electricity in the state of Uttar Pradesh, India. The study examines different attributes of electricity, including reliability, power, and price, using choice experiments—a method uniquely able to disaggregate the willingness to pay for each attribute. Household surveys were carried out in 22 villages, spread across 4 districts in the state and covered a total of 216 households. Results indicate that consumer preference for electricity is based most significantly on (in order of strength of preference) power, reliability, and price. Further, despite 9.4 hours of electricity supply per day from the main grid, as compared to an average of only 7.2 hours from microgrids, the respondents exposed to both systems were almost twice as satisfied with the microgrid’s reliability. Based on these findings, the study provides five policy recommendations for strengthening the rural electricity supply sector and enhancing the electricity access in India.
CSS Publication Number:
April 12, 2017
Graber, Sachiko and Tara Narayanan. (2017) “Solar microgrids in rural India: Consumers’ willingness to pay for attributes of electricity.” Master’s Practicum, University of Michigan: Ann Arbor: 1-35.