Quantifying carbon and distributional benefits of renewable energy programs: the Bangladesh case study on solar home systems

Scaling-up adoption of renewable energy technology—such as solar home systems (SHS)—to expand electricity access in developing countries can accelerate the transition to low-carbon economic development. Using a national household survey, this study quantifies the carbon and distributional benefits of SHS programs in Bangladesh. Three key findings are generated from
the study. First, dissemination of SHS brings about significant carbon benefits: the total carbon emissions avoided from replacing kerosene use for lighting by SHS in non-electrified rural households is equivalent to about 4 percent of total annual carbon emissions
in Bangladesh in 2007. This figure increases to about 15 percent if grid-based electricity generation is used as the energy baseline to estimate the carbon avoided from SHS installation. Second, SHS subsidies in rural Bangladesh are progressive when the program is geographically targeted. Third, SHS has market potential in many rural areas if micro-credit schemes are made available. The propensity to install SHS is very responsive to income, with a 1 percent increase in per capita income increasing the probability of installing SHS by 12 percent, controlling other factors.