Problem:‍

Access to clean energy solutions such as clean cooking, solar systems, and mini-grids remains constrained in borderland and underserved communities across the Horn of Africa, driven by limited demand-side data, weak distribution models, and insufficient understanding of market potential.

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Solution/Outcome:‍

We contributed to the design of a framework for assessing demand and business potential for clean energy products. The assignment involved a rapid market assessment and baseline study combining geospatial analysis with a sample of over 2,000 respondents, including automated surveys, focus group discussions (FGDs), and key informant interviews (KIIs). An economics based assessment of the market was conducted.

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Methodology Note:‍

The economic model adopted was the Willingness to Adopt (WtA) analysis, a dichotomous concept related to Technology Adoption Model. Willingness to Pay (WtP) is a non-market valuation stated preference method, that investigates the highest price a customer would be willing to pay for a unit of a product or service. In this study WtP is used to assess the estimated cost of investing in a cleaner cooking method or cleaner lighting method within a typical household.
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WTP was assessed for ‘potential’ users of the ‘desired’ product at four levels low, medium, medium-high and high. Cooking methods, an improved CC stove was designed to be the desired product and potential customers were  households not using an improved CC stove but using other cooking methods (three-stone, traditional cookstoves, open fire). For lighting and energy sources, a Tier 1 Solar-Home-System (SHS) was designed to be the desired product, while potential customers were HHs not using a Tier 1 SHS. 
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For each WTP assessment level, an anchor price was determined through a qualitative pre-survey pilot exercise among households in the survey locations. Respondents were shown cards with image examples of an improved cookstove. First, the respondents were asked if they were Willing to Adopt (WtA) or, in other words, Willing to Switch (WtS) to cleaner cooking and lighting methods before being subjected to the WTP experiment. Respondents who were willing to pay the anchor price were further assessed for higher price bands. Respondents not willing to pay the anchor price were assessed for the lower price bands. A respondent could only belong to the one price band which represents their highest willingness to pay.

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