Can Free Markets Deliver the Goods and Services? Quality in the Market for Household Solar Electric Systems in KenyaEPA Grant Number: U915939
Title: Can Free Markets Deliver the Goods and Services? Quality in the Market for Household Solar Electric Systems in Kenya
Investigators: Jacobson, Arne E.
Institution: University of California - Berkeley
EPA Project Officer: Lee, Sonja
Project Period: January 1, 2001 through January 1, 2004
Project Amount: $81,414
RFA: STAR Graduate Fellowships (2001) RFA Text | Recipients Lists
Research Category: Academic Fellowships , Economics and Decision Sciences , Fellowship - Environmental Decision Making
The objective of this research project is to determine if high-quality services can be delivered consistently to customers within the current configuration of the Kenyan solar-energy market, or if substantial changes of approach are required to achieve widespread performance improvements. Solar electric systems are being promoted increasingly around the world to provide rural electrification in developing countries. Solar energy advocates often note that there are approximately 2 billion people in the world who lack access to modern energy services, and that household-scale solar-energy systems can play an important role in meeting this demand without adding to the global burden of greenhouse gas emissions. In recent years, there has been an increasing trend to disseminate solar-energy technologies using a "free market-oriented" approach. My work to date in Kenya suggests that the quality of the electricity services delivered from solar electric systems varies widely, and there is ample evidence of widespread information market failure problems.
I propose that although markets often do a good job of distributing products, they are generally poor vectors for information transfer, particularly when the information is technical knowledge about new and complex technologies such as solar energy. This raises questions about the effectiveness of markets to serve as vehicles for technology transfer in the absence of nonmarket measures to address the inevitable "knowledge gaps." I will address this issue in the Kenya context in a three-step process. First, I will use technical measures to determine the actual performance of household solar electric systems in Kenya. Second, I will use observation, interview, and survey methods to understand the features of the Kenyan solar market that facilitate or inhibit the delivery of high-quality electrical services to Kenyan families. Finally, I will combine these analyses to predict the degree to which quality can be improved through interventions in the Kenyan market. The most promising intervention strategies will be formulated into a set of policy recommendations.