Electricity consumption: The role of grid reliability in appliance ownership and usage in Rwanda

Using household survey data and electricity reliability data, this study analyzes the relationship between grid reliability and appliance ownership and usage in Rwanda, a low-income country in Sub-Saharan Africa. We estimate the effect of reliability on household appliance ownership by employing lightning as an instrumental variable for grid reliability. The findings reveal that while grid reliability has a limited effect on the total number of appliances owned, it significantly influences the types of appliances households choose to acquire. Higher outage frequencies are linked to reduced ownership of entertainment devices, such as televisions and decoders, particularly in low-income households. Conversely, high-income households in low-reliability areas tend to reduce their ownership of high-energy, costly appliances, like fridges and cookers. The study further explores how appliance ownership affects electricity consumption by estimating the conditional demand. The findings suggest that improving grid reliability could modestly enhance electricity consumption among wealthier households, though complementary policies targeting the affordability gap are needed to encourage low-income households to increase their consumption as well. Consistent with prior research, income remains a significant barrier to both appliance ownership and usage in low-income households.