Energy Governance Case Study #06

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From 2002–2007, more than 400,000 solar home systems (SHS) benefitting two million individuals were sold in northwestern China under the Renewable Energy Development Project (REDP). REDP has been hailed as a best practice example in SHS deployment for its unprecedented scale and the combination of technology improvement and market development support components to strengthen the country’s renewable energy industry. While the World Bank has itself conducted post-project evaluations, our report presents REDP’s first independent evaluation with the intent of determining the extent that its successes have been sustained. This report utilises a case study format supported by in-depth interviews with the project’s relevant stakeholder groups and finds that SHS ownership provides monetary and non-monetary benefits to users and that their portability complements the lifestyle of the region’s nomadic herders. Figure 1, for example, shows a vendor using batteries charged by solar panels to power a compact fluorescent lightbulb which illuminates his road-side shop. However, we also find that purchasing decisions are still based more on price than quality, and after-sales service networks remain weak, despite pre-project documents emphasising the objective of strengthening these networks. Furthermore, households in REDP’s coverage area are gradually gaining access to hydropower-based grid electricity, obviating the need to purchase SHS units. Notwithstanding these challenges, we note several lessons the REDP offers other rural energy development projects and programmes. The provision of direct credit access to consumers can greatly minimise the first-cost hurdle in purchasing a SHS. REDP-sponsored studies assessing the effects of SHS ownership on income and development indicators, though imperfect, directed marketing and programme activities. Improving the quality and availability of after-sales service at the township and provincial level is incredibly important so that SHS are maintained. Rather than view SHS ownership as an end in and of itself, policymakers should instead consider them a transition technology towards eventual grid electrification. REDP successfully executed a “start to finish” quality process in that it established a “whole-cycle quality improvement” through manufacturing standards and practices, which strengthened the quality of SHS at multiple ends of the supply chain.


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