World Bank/GEF solar home system projects: experiences and lessons learned 1993–2000

Twelve projects provide energy services to off-grid rural households in developing countries by enhancing markets for solar home systems and by removing barriers to their dissemination. Project approaches are reviewed, along with early implementation experience and lessons suggested by experience. Most projects incorporate the following features: pilot private-sector and NGO delivery models; pilot consumer credit delivery mechanisms; pay first-cost subsidies and offer affordable system sizes; support policy development and capacity; develop codes and standards and establish certification, testing, and enforcement institutions; and conduct consumer awareness and marketing programs. Most projects are just beginning implementation; a few are almost completed. Lessons from early experience suggest that: solar home system delivery firms face a myriad of difficulties operating in rural areas; credit risk is a serious concern of both financiers and dealers and makes credit sales particularly challenging; technical performance of systems is becoming well-proven; customers desire a range of component options and service levels and can benefit from even small systems; projects must recognize the link between rural electric-grid extension and solar home system demand; and marketing campaigns can be extremely costly and time consuming in rural areas. Challenges are to demonstrate sustainable and replicable business models, develop regulatory models for energy-service concessions, and integrate rural electrification policy with solar home system delivery.