Do off-grid solar energy based productive activities increase income of beneficiaries: An impact evaluation using PSM and DID techniques

Abstract

Renewable energy has emerged as one of the climate-friendly development alternatives to provide clean and sustainable energy access. Productive use of renewable energy for livelihood and income generation is an emerging area of development, however, it remains under-explored for its socio-economic impact on beneficiaries, although such interventions have potential to contribute towards climate change targets and sustainable development goals. In this context, this research, using control-treatment group design, estimated the economic impact of solar energy-based productive interventions (solar energy for cotton yarn production) located in Amravati district of Maharashtra (India). For improving the robustness of the impact evaluation, the study used retrospective observational study design combining the use of propensity score matching and difference-in-differences techniques. The results obtained from the field-based data of 411 respondents indicated that there was a strong demand and interest for productive activities using renewable energy among the weaker section of the society for livelihood with a need to increase awareness about associated policy frameworks and to provide concessional capital. The findings further depicted a significant change in beneficiaries' income vis-à-vis non-beneficiaries with associated multiplier effects on food access, health, education, women upliftment, and work environment. Though, the rise in the income was impressive, however, there was a need to upscale the solar charkha operations to contribute additional income to the beneficiaries' family, to complement the intervention using RE based, locally processed commodities with beneficiaries managing the supply chains, and to provide concessional capital structure. These findings are critical as India has promulgated several policy measures including productive use of renewable energy to address development issues and climate change goals.