Rural electrification in sub-Saharan Africa: A willingness to pay analysis of electricity access in Kenya

Despite the significant progress in Kenya's rural electrification rates over the last few years, a large share of the country's rural population remains without electricity. While existing research focuses on developing rural electrification strategies, scientific research on households' demand for electricity access methods appears to be limited. This study investigates households' economic valuation of electricity access in rural regions in Kenya. The contingent valuation method is employed to obtain national households' willingness to pay (WTP) for two electricity access methods: grid connection and off-grid solar-home-system installation. The estimated mean WTP for grid connection (∼$78) is almost twice as high as for an off-grid solar-based solution (∼$43). However, the financial viability of obtaining an on-grid connection appears to be limited, especially among low-income groups. The ownership of property and solar lighting devices, self-employment, household expenditures, and preferences for using mobile money services significantly influence households' WTP for domestic electricity access. These findings can assist policymakers in developing and implementing efficient strategies to promote rural electrification in sub-Saharan Africa. Such measures might focus on subsidizing initial investment costs for electrification technologies, promoting access to financial institutions, implementing efficient payment mechanisms, and informing households about decentralized solar-based systems.