Argentina Solar Home System and Tariff Impact Evaluation

Universal access to environmentally and financially sustainable electricity is a top priority of many developing countries, with 1.6 billion people worldwide still lacking access. In Argentina, the government seeks to provide energy to the remaining electricity-deprived people in the country with the installation of green off-grid solutions in the form of solar home systems (SHSs). Due to low income levels of the beneficiary households, subsidies for both installation and maintenance are required. Subsidies puts constraints on government resources and jeopardizes the (financial) sustainability of the program. On the other hand, empirical evidence on the ways in which users and local economies are affected by electricity access expansion remains unclear.
This impact evaluation is related to a World Bank project, PERMER II (Renewable Energy Project for Rural Markets), and will focus on the northern province of Salta, where approximately 10,000 SHSs will be installed (20% of the 50,000 estimated for the whole of Argentina). The evaluation consists of three interventions: the installation of SHSs, capacity trainings on maintenance and operation of the systems, and variation in tariff subsidy levels. These interventions will allow us to study the impact of SHSs on the quality of life of rural households (e.g., household production and income, health and education), the underlying causal mechanisms, and the possibility to magnify these impacts through additional capacity training about the optimum uses of their SHSs to users. In addition, the evaluation aims to inform the design of a sustainable tariff and subsidy system by examining the willingness to pay for the service, how long it takes for households to reach their “true valuation” of electricity access, and what factors affect the rate at which this happens. All three interventions will be randomly assigned to household groups during the period 2016-2019.