This toolkit provides a framework to design responsible subsidies, building on lessons learned, considering different contexts and objectives, and balancing tradeoffs. The way a subsidy is designed will have an impact on the cost to the government, the speed of rollout, the number of people reached and its scalability, as well as the market-distortion and political risks discussed above. The toolkit provides recommendations on how to inform the subsidy design, options to set specific parameters (targeting, subsidy level, delivery, verification, exit or adjustment), as well as guidelines for communication about subsidies. It also provides recommendations on monitoring, evaluation, and adaptation mechanisms. This toolkit is primarily focused on subsidies for the purchase of off-grid solar products and clean cookstoves; it is limited in its application to fuel or electricity subsidies. Off-grid solar electrification is making the most progress through the selling of devices to end users (on cash or credit through mechanisms such as Pay-As-You Go). This toolkit draws primarily from the experience of subsidizing such sales and is therefore most applicable for the design of subsidies for product purchase. The report however acknowledges the importance of emerging Fee-for Service or Electricity-as-a-Service models, and most of the recommendations in this toolkit are also suitable for these models. However, they are not cited as prominently. Similarly, this toolkit is most applicable to subsidies for the purchase of improved and clean cooking devices. Less so for subsidies for fuels, such as liquefied petroleum gas (LPG), or the electricity consumed by electric cooking devices.
Authors
- Disclosure Date
- 2024/07/16
- Disclosure Status
- Disclosed
- Doc Name
- Designing Responsible End-User Subsidies for Energy Access : A Toolkit Featuring Case Studies for the Design of Subsidies in Off-Grid Solar and Clean Cooking
- Pages
- 94
- Product Line
- Advisory Services & Analytics
- Published in
- United States of America
- Rel Proj ID
- 1W-Programmatic Asa For Electricity Access -- P174361
- TF No/Name
- TF0B8021-Electricity Access Program Supervision,TF0C3699-Financial Innovation For Energy Access - FY21-24 - Own-managed - 3,TF0C3703-Off-Grid Solar Scale-Up - FY21-24 - Own-Managed 3,TF0C3704-Improving Livelihoods through Productive Use of Electricity 3,TF0C3705-Improving Livelihoods and Human Capital - Own Managed 3,TF0C3706-Leaving No One Behind - FY21-24 - Own-managed 3,TF0C3724-Mini Grid Facility - FY21-24 Own-Managed - 3,TF0C4531-Clean Cooking Fund - FY21-24 Own-Managed - 3,TF0C4532-Global Electrification Platform (GEP) - FY21 - 24 - Own-managed II,TF0C4560-Integrated Electrification Strategies & Planning - FY21-24 - Own-manage
- Unit Owning
- ESMAP2 (IEES2)
- Version Type
- Final
- Volume No
- 1
Table of Contents
- List of figures 6
- List of tables 6
- List of case studies 7
- Key definitions 8
- The Need for End-User Subsidies 11
- Executive Summary 11
- The EUS Design Framework 12
- A call to action 18
- 1.1 Role of decentralized energy in universal energy access 19
- 01. Introduction 19
- 1.2 Challenges and interventions for closing the energy access gap 20
- 1.3 End-user subsidies as a solution to close the affordability gap 23
- 1.4 The need to design responsible EUS programs 24
- 2.1 Introduction 26
- 2.2 Pre-design elements 26
- 02. Design framework for responsible end-user subsidies 26
- 2.3 Eligible Households and Targeting Mechanisms 30
- 2.4 Eligible Products and Subsidy Level 41
- 5 Delivery of Subsidy 50
- 2.6 Verification 66
- 2.7 Exit or Adjustment Strategy 69
- 2.8 Communication and Feedback 74
- 2.9 Conclusion 78
- 3.1 Introduction 80
- 3.2 Designing an EUS pilot targeting the poorest in Malawi 80
- 03. The design framework in practice 80
- 3.3 Designing an EUS pilot targeting refugees and host communities in Uganda 83
- 3.4 Analyzing EUS of Rwanda REF Window 5 86
- 3.5 Analyzing EUS of Nigerias OBF for SHS under NEP 89
- 04. Appendix 93
