Acknowledging the challenges embedded in mini-grids solutions

Across rural Tanzania, some 80% of households still have low or no access to electricity. As in much of Sub-Saharan Africa, one overarching problem is sparsely deployed electricity grids and the high cost of extending them to areas with low small populations. Hence, the excitement over the ease of installing solar-powered mini-grids to generate low-cost supply.

But, as Hannah Mottram, a PhD candidate from the University of Sheffield, has discovered, installing the hardware doesn’t always guarantee that electricity will be available where and when people connected to a local system need it. Or, at an affordable price.

As part of her research, Mottram lived in Tanzania for eight months, collecting data in the field and interviewing both households and relevant stakeholders, from local community groups, practitioners and non-governmental organisations (NGOs) to academics, policy makers and energy companies. Thanks to an Energy Poverty in Early Career (EPEC) grant from the Fuel Poverty Research Network (FPRN), she was able to dedicate additional time to analyze months of raw data. 

Rooftop solar panels providing access to electricity in a remote village in the Pwani region of Tanzania. 

As Mottram highlights in her research, a great deal of technical planning and academic research related to energy access is fundamentally flawed in that both are carried out by ‘experts’ from the Global North who have little understanding of energy needs in rural areas of the opposite hemisphere. Seeking to work differently, Mottram travelled to Tanzania and planned a research project that would be inclusive, using a range of methods, including participatory approaches, interview, focus groups, surveys and community observations. 

Understanding problems that arrive with the solution

Mottram investigated six mini-grid projects. Five were owned and operated by a private company (EnSol) and spread across Mpale (a network of sub-villages in a very remote, rural area) where they served ~3 000 people across 730 largely poor households. The sixth system was installed by an NGO and run by a community-owned company.

While access to electricity quickly transformed many aspects of daily life for almost everyone, it soon became clear that the tariff schemes set up by system owners were undermining equity. While a range of tariffs – e.g. block, time-of-use and monthly charge – were offered to residential customers, further investigation showed disparities that were somewhat shocking, including in relation to prices in the United Kingdom.

“We have found that poorer customers pay higher rates per unit on most mini-grid projects,” says Mottram. “In fact, poorer customers with lower usage (e.g. just lights and phone charging) typically pay about double per unit than customers with additional appliances.” 

 Cost per kWh (GBP)Energy usage (kWh/month)Cost per month (GBP)Low income per month (GBP)% of income spent on energy
Solar mini-grid10.35-1.052.440.85-2.5612.337-20.0%
UK average20.2130064.081 217.005.0%

1. Data from field work and 2. Data from (UK cost per kWh includes standing charge) and ns/householddisposableincomeandinequality/financialyearending2021

The higher costs – and indeed confusion about the various tariffs – were revealed to be prohibitive for poorer individuals considering connecting to mini-grid systems or sometimes constrained their actual consumption or triggered self-disconnection. Customers were also aware that, per kilowatt hour (kWh) they were paying much higher prices (TSH 1 000 – TSH 3 000 [TSH = Tanzania schilling]) than would be charged by TANESCO (the sole grid provider) if they had grid access (TSH 100).

“Fairness and justice are big themes in my work,” says Mottram, “and I think it’s important to do investigate those issues as well as the economic and technical side of things.”

To their credit, some companies offer flexible payment plans and do awareness campaigns to help households better understand how they can use electricity.

Providing electricity to community facilities, such as the village health centre, had the effect of improving – in a more equal way – the lives of many individuals and families. Before, women giving birth had to bring their own lights, which some could not afford. Now, with entire building lit up, it is better able to ensure all women get more equal care. 

Before health clinics were electrified with solar panels, patients needed to bring their own flashlights for treatment after dark.

Re-thinking electricity tariffs to boost energy justice

During her time in-country and in the recent follow-up work, Mottram worked closely with Tanzania Renewable Energy Association, ultimately identifying eight relevant stakeholders. Part of the challenge that emerged was figuring out who was best placed to take action to address the access and affordability challenges described above.

Admittedly, says Mottram, “The companies are in a difficult situation. When our team presented the tariff problem and explained why it needs to be rectified, the companies would counter with the reality that they need to cover their costs and ask ‘Well, what should we do?’”

As Mottram discovered, however, many of the ‘local’ companies are subsidiaries of large multi-nationals. As such, while local entities might be focused on ‘What’s in it for us?’, their parent companies should have extensive experience in offering diverse pricing schemes, including aligning pricing with government subsidy schemes.

This reflects, in part, that financing remains a major challenge for both mini-grid practitioners (for project implementation) and users (micro-credit to purchase appliances). Practitioners identified a need for skills in finding investors, completing feasibility studies, and carrying out project design and implementation. Within communities, setting up new financing schemes would typically involve microfinance providers (including local ‘Vicoba’ and ‘Saccoss’ groups), electrical appliance vendors, other village institutions and local people.

Mottram made sure that local customers were invited to participate in workshops to better understand their needs and concerns.

In turn, that meant involving policy makers (from both national and regional government agencies) and other stakeholders such as UN agencies (e.g. UNIDO and Sustainable Energy for All),  other NGOs (e.g. the Alliance for Rural Electrification) and donors. More unusual was Mottram’s insistence that these ‘big’ stakeholders directly engage with entities who better represent the poor, such as micro-finance organisations (Vicoba and Saccoss groups, locally), electrical appliance vendors and village institutions. Indeed, the poor were invited to speak for themselves. 

Mottram’s team soon found that getting all parties in one place was a considerable challenge. Getting them to listen to and collaborate with each other was even bigger. To encourage movement towards shared goals, Mottram’s team emphasized that building a ‘right-sized’ system and restructuring tariffs appropriately is in everyone’s best interest. 

“If we can supply mini-grid based electricity in a way that balances a successful business plan with being fair and just, then great,” says Mottram.

From research to recommendations 

Ultimately, Mottram used her research to make recommendations to improve the experience of rural electrification for communities, particularly households in poverty. Transferring knowledge from community-based research to policy makers and practitioners was a key aspect of her work.

“For example, we coded responses in interviews that referred to how companies could better support the community, and how people perceived the success of projects,” says Mottram.

As could be expected, Mottram’s time in Tanzania was personally and professionally informative.

“It’s not as simple as ‘here’s the solution, now implement it’,” she admits. “I’m more aware that the extractive approach of researchers in Global North often ‘checks the boxes’ rather than providing a real-world solution.” 

Mottram is also more aware that while rural electrification can trigger local economic development, other barriers remain, such as poor roads and access to markets. Thus, electrification needs to be considered within more holistic projects.

To generate real change by electrifying rural communities, Mottram now advocates for talking to the people first, to understand what they really need and hear their concerns. Without their input, potential solutions may prove ineffective or unsustainable.

The FPRN grant, says Mottram made it possible to re-engage with people she interviewed while in Tanzania and to more deeply analyse her fieldwork in ways that would help generate implementable recommendations for each of the stakeholders working on a just, clean energy transition (access report  here) .

“Mini-grid companies have told us that our analysis on this will help them to size their projects and inform them on ways they should engage with communities more accurately,” she says.

At present, many mini-grid projects are oversized, which can create a vicious cycle. If operators have overestimated demand during planning, they need to charge higher prices per unit consumed, while higher prices can cause some customers to consume even less.

The work also helped all parties understand that there are many ways that success. Techno-economic measures could be the number of connections, income compared to expenditure, number of outages and system reliability. Social measures include the impact on households and the community, particularly considering different socio-cultural-economic groups. Interlinkages also emerged: if households feel more included in a project, they may be more likely to pay bills on time, which means the mini-grid can be maintained, resulting in fewer outages and greater customer satisfaction.

Kate Denhart wrote a series of three blogs about the work of FPRN EPEC grantees while completing an internship with The Energy Action Project (EnAct) in Summer 2022.

Hannah Motram’s Translating community based research on electrification into resources for policy and practice project was funded by the FPRN’s Energy Poverty in Early Career programme.