PROGRESS IN PHOTOVOLTAICS: RESEARCH AND APPLICATIONS
Prog. Photovolt: Res. Appl. 2001; 9:455±474 (DOI: 10.1002/pip.392)
Broader
Perspectives
Experience with Solar Home
Systems in Developing
Countries: A Review
F. D. J. Nieuwenhout1*,y , A. van Dijk1, P. E. Lasschuit1, G. van Roekel1, V. A. P. van Dijk2,
D. Hirsch3, H. Arriaza4, M. Hankins5, B. D. Sharma6 and H. Wade7
1
Netherlands Energy Research Foundation ECN, Petten, Netherlands
Utrecht University, Department of Science, Technology and Society, Netherlands
Fusion 21, Amsterdam, Netherlands
4
NRECA, Guatemala
5
Energy Alternatives Africa, Nairobi, Kenya
6
Sustainable Energy Solutions, New Delhi, India
7
Solar Energy Research and Training Center, Naresuan University, Bangkok, Thailand
2
3
Solar energy is widely perceived as a promising technology for electricity generation
in remote locations in developing countries. It is estimated that 13 million solar
home systems had been installed by early 2000. An estimated one-third of installed
systems were backed by foreign donor support in government programmes and twothirds supplied by commercial dealers. The estimated growth in the deployment of
solar lanterns is less than for SHS. One out of every 100 households that gain access
to electricity in developing countries uses solar power. In spite of these successes,
doubts have arisen about the effectiveness and suitability of small PV systems for
rural development. Many organisational, ®nancial and technical problems appear
to present dif®culties. A literature survey has been conducted to make an inventory
of experience with solar PV applications for households in developing countries. The
main ®nding is that an adequate service infrastructure is required to make projects
viable. Household choice in system sizes is often too restricted in donor-funded
projects. Smaller systems sold for cash can be a good alternative to credit systems
by offering to increased affordability. Gaps in existing knowledge have been identi®ed, which could be overcome by ®eld monitoring programmes. Copyright # 2001
John Wiley & Sons, Ltd.
1. INTRODUCTION
A
bout two decades have passed since the ®rst solar home systems were installed in developing countries. Currently, hundreds of companies and other organisations produce and distribute these systems,
which have been introduced in practically all countries of the world. Experience has been gained in
numerous projects, although this information is not always easily accessible.
* Correspondence to: Dr F. D. J. Nieuwenhout, PO Box 1, 1755 ZG Petten, The Netherlands.
y
E-mail: nieuwenhout@ecn.nl
Contract/grant sponsor: Novem; contract/grant number: 146.610-401.1.
Contract/grant sponsor: ECN.
Copyright # 2001 John Wiley & Sons, Ltd.
Received 12 April 2001
Revised 15 June 2001
456
F. D. J. NIEUWENHOUT ET AL.
A number of successful pilot projects received widespread attention, such as Sukatani in Indonesia.1 After
these success stories, solar home systems gradually came to be adopted as a viable option to provide rural
electricity services in developing countries.2 However, not everything is satisfactory with household solar
PV systems. Early projects faced many technical problems, mainly with charge controllers and lights. Setting
up sustainable PV businesses turned out to be more dif®cult than expected. Nowadays, few commercially viable
companies go beyond selling equipment to provide installation and after-sales services.
A major barrier for a rapid deployment of solar energy in rural electri®cation is the high initial investment
cost of the systems, caused by the high price of the solar PV modules. However, even with substantial subsidies
(such as the government programmes in India3 and Mexico4±6) or when access to loans is possible
(IREDA loans in India,7 World Bank loans in Sri Lanka8 and Zimbabwe,9,10 government loans in Botswana11
and Namibia,12 bilateral projects in Bolivia13 and Guatemala14) the growth is still limited.
For a number of countries, World Bank loans with a solar home system component exist; in other countries
loan schemes are still in preparation. However, none of the projects funded by the World Bank has yet
succeeded in achieving a substantial scale. Bilateral donors have been somewhat more successful in funding
large scale deployment (e.g. the AusAid project in Indonesia of 36 000 systems funded by Australia).15 But
there is often a supply-push to support the local industry of the donor country. Export subsidies reduce system
costs, and create large markets. This can help in reaching quantitative targets, but sustainability after the project
ends remains uncertain.
To contribute to the discussion on the success factors of solar home system introduction, an assessment has
been made of actual ®eld experience in the open literature.16 This paper presents the main results of this study.
We conducted an analysis of the available information from the viewpoint of four main research themes:
institutional aspects, ®nancial aspects, technical ®ndings; and user experiences. These themes cover most of
the aspects around deployment of solar PV for household purposes in developing countries. The methodology
for obtaining data is presented in Section 2. In Section 3, general results of the data are presented. Each of the
four research themes is covered by a separate section. For each theme, we present the major ®ndings and some
illustrative examples (Sections 4±7). Main conclusions and recommendations are formulated in Section 8.
2. METHODOLOGY
A team of ten researchers from ®ve countries conducted a literature survey, focusing on ®eld experience of solar
home systems in developing countries.16 The study was restricted to a literature search for reasons of cost and
time. Only literature was reviewed that was more recent than 1992, and which contained information about
®rst-hand experience. Additional written contributions came from H. Arriaza, M. Hankins, B. D. Sharma
and H. Wade, and ®eld visits were made by D. Hirsch and F. Nieuwenhout to selected developing countries.
Current knowledge is scattered over different sources, sometimes dif®cult to access, and possibly incomplete. A
total of 104 projects had suf®cient information to be entered in a database. An adapted version of the Renewables for Sustainable Village Power (RSVP) database of NREL has been used.17 A ®ner subdivision into topics
was made, especially in the category of `lessons learned'. The literature review focused on four areas: experience with institutional models; ®nancing; technical aspects; and user experience. Most of the reported activity
(86%) consists of projects or programmes (Figure 1); 29% is still in a pre-commercial stage, where the scale of
activities is too small to be ®nancially attractive for entrepreneurs. Very little quantitative information is available about commercial distribution of systems. This will bias the analysis since commercially sold systems are
usually smaller than systems distributed through projects.
3. GENERAL RESULTS
3.1. Statistical ®ndings
Commercial sales constitute only 14% of the activities for which information could be obtained. However, we
estimate that about two-thirds of the solar home systems are sold through commercial channels. There is a
Copyright # 2001 John Wiley & Sons, Ltd.
Prog. Photovolt: Res. Appl. 2001; 9:455±474
SOLAR HOME SYSTEMS IN DEVELOPING COUNTRIES
457
Figure 1. Distribution of project types for the 85 projects (of 104) in the database for which project type was speci®ed
serious under-representation of commercial activities here, caused by the fact that it much easier to obtain
documentation from government or NGO projects. Interpretation of the statistical ®ndings should take account
of this bias.
Households are the main users in all reviewed projects. In 16% of the activities there are also other
bene®ciaries (Figure 2). Most solar home system activities involve more than one actor besides the households.
Figure 3 shows the frequency of occurrence of the different project participants. Governments and bilateral
donors are involved in almost half the projects in the database. We assume that this is due to the fact that foreign
donor projects have the largest chance of being described in easily accessible literature sources.
In 79% of the projects, the solar home systems are user-owned, another 13% owned by utilities in feefor-service projects, and the remainder by co-operatives and private sector companies (Figure 4). Lighting,
radio and television are by far the most common applications of solar home systems (Figure 5). In a quarter
Figure 2. Distribution of the type of user in the 67 projects (of 104) in the database for which type of user was speci®ed
Copyright # 2001 John Wiley & Sons, Ltd.
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F. D. J. NIEUWENHOUT ET AL.
Figure 3. Frequency of occurrence of participants in the 80 projects (of 104) in the database for which project participants
were speci®ed
Figure 4. Distribution of the ®nal ownership of the systems in the 62 projects (of 104) in the database for which ownership
was speci®ed
Copyright # 2001 John Wiley & Sons, Ltd.
Prog. Photovolt: Res. Appl. 2001; 9:455±474
SOLAR HOME SYSTEMS IN DEVELOPING COUNTRIES
459
Figure 5. Main application of the systems in the 84 projects (of 104) in the database for which main application was
speci®ed
of the projects, lighting is the only application. About half of the projects have a size between 100 and 1000
distributed systems (Figure 6). The focus of this study was on recent projects, as can be seen in Figure 7. In more
than half of the projects, a credit scheme increases affordability (Figure 8).16
3.2. Total number of installed systems
An estimate was made of the total number of installed solar home systems in developing countries in early 2000.
For some countries, the number of installed systems could be obtained; for the rest it is estimated, based on a
conservative estimate of a penetration rate. Figures for a number of countries for which data could be obtained,
add up to 931 700 (Table I), the last column of which shows the calculated share of the total population of the
country, based on an assumed average household of ®ve persons. With this assumption, 017% of the total population in the countries in Table I have access to the services of a solar home system. A conservative assumption
was made, that in the rest of the developing countries the share of the total population with solar home systems
is 01%, substantially less than the ®gure for countries with reliable estimates of the number of solar home systems. According to this estimate, about 13 million solar home systems have been installed up to now. More than
half of the projects reviewed had module capacities in the range of 35±54 W. However, there is an under-representation in the literature of commercial sales, which are dominated by 10±12 Wp modules. The total installed
capacity of solar home systems is therefore estimated to be around 40 MWp.
4. MODELS FOR DEPLOYMENT OF SOLAR HOME SYSTEMS
It is generally accepted that an institutional model for successful implementation is country speci®c.18,19 Which
model is most suitable for a country depends on institutional, legal, socio-economic and cultural conditions.
Furthermore, a project can be successful only if every part of the institutional model is functioning properly:
if one part is weak, the entire project may fail. As a consequence, it may take several projects to ®nd a successful
Copyright # 2001 John Wiley & Sons, Ltd.
Prog. Photovolt: Res. Appl. 2001; 9:455±474
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F. D. J. NIEUWENHOUT ET AL.
Figure 6. Distribution of the project size in the 70 projects (of 104) in the database for which project size was speci®ed
Figure 7. Distribution of the start dates of the 70 projects (of 104) in the database for which start date was speci®ed
approach for a given country. Markets are often characterised on the basis of the different arrangements for
®nancing and ownership. The four institutional models used in our analysis are: donations; cash sales; consumer
credit; and fee-for-service. These cover both commercial markets and government projects. Rental schemes are
categorised under `fee-for-service' when maintenance and repair service are provided, and under `consumer
credit' otherwise.
Copyright # 2001 John Wiley & Sons, Ltd.
Prog. Photovolt: Res. Appl. 2001; 9:455±474
SOLAR HOME SYSTEMS IN DEVELOPING COUNTRIES
461
Figure 8. Distribution of institutional models for the 51 projects (of 104) in the database for which institutional model was
speci®ed
4.1. Donations
Some of the early projects used the donation delivery mode, implying that the donor provides the hardware free,
or almost free. Social objectives provide the motivation for donations of solar home systems. Users are
generally less involved and feel less responsible for the donated systems compared with systems for which they
had to contribute a considerable part of the costs. Most donations are limited to the hardware only, often resulting in neglect of maintenance and service requirements. In a government programme in Tunisia, where the
Table I. Distribution of installed solar home systems in developing countries in 2000
Country
Number of SHS installed by
early 2000 (in thousands)
Total population in
millions in 1998*
People's republic of China**
Kenya
India
Mexico
Indonesia
Zimbabwe
South Africa
Morocco
Dominican Republic
Honduras
Nepal
Argentina
Swaziland
Subtotal
Other developing countries (estimate)
Total (estimate)
0285
0150
0118
0090
0080
0080
0060
0050
0010
0003
00025
0002
00012
09317
03668
12985
1237
00293
0980
0096
0204
00117
00414
00278
00083
00062
00229
00361
0001
2702
1834
4536
Share of total population
with SHS (%)
012
256
006
047
020
342
072
090
060
024
005
003
060
017
010
014
*Source for population data: World Development Indicators 2000, World Bank (except Swaziland). The total population ®gure has been
used. Rural population would have been more appropriate, but this number is not always available.
**Estimate based on sales ®gures for ®ve provinces until 1997, and extrapolation for 1998 and 1999. We expect this to be an underestimate
of the actual number of installed systems in China.
Copyright # 2001 John Wiley & Sons, Ltd.
Prog. Photovolt: Res. Appl. 2001; 9:455±474
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F. D. J. NIEUWENHOUT ET AL.
hardware is 100% subsidised, and only an operation fee of US$5.20 per month was asked, people refused to pay
for maintenance. This was not caused by an inability to pay, since some time later people could afford US$208
for a grid connection.20
Advantages of donation are low initial costs for the user (often zero), the potential for cost reduction through
economies of scale (purchase costs, transaction costs, installation costs), and rapid deployment. However,
negative experience with donated systems has made this type of deployment mechanism less popular.21 Usually,
these projects failed because of lack of user commitment, and because it was not originally realised that systems
need maintenance for sustainable operation.
In phase I of the Zacapa project in Guatemala, SHS were donated by the NGO PLAN International.14 Users
were responsible for repair and replacement. User training was provided by the NGO Fundacion Solar, who
mentioned the need to begin saving for battery replacement right from the outset of the project. Fundacion Solar
evaluated the project after 5 years. Of the 124 systems evaluated, 45% were not working. In spite of training, the
users were not able to repair basic failures correctly; one reason was that training was not directed at the
principal users, women. Generally, failure of ballasts caused ¯uorescent tubes to burn out. When replacement
of the tubes did not prevent new failures, use of the system was abandoned. In general, the larger the system
(number of appliances), the better it was maintained. Furthermore, savings in battery replacement were not
made because of the lack of a long-term saving culture in these rural communities. In phase II of the project,
villagers had to pay for at least 40% of their systems: it was observed that they were more likely to provide
proper maintenance and to save for repairs and replacement. It can be concluded that a ®nancial contribution
of the user of a SHS probably provides an incentive for sustained operation of the systems.14
There is ample experience with donations in large projects. In this type of project, the user is the key to
sustained operation of the system. Donations can work, provided the project contains provisions to create user
commitment. Users must understand that they must maintain the system (or pay for maintenance) and save for
replacements. This type of project puts high demands on the leading organisation, which has to decide whether
a target group has the proper social and cultural conditions for this type of approach, and how user commitment
is to be created. If these lessons are taken into account donation can become a successful delivery mode, as has
been shown by one of the world's largest SHS programs, the Mexican government programme. Evaluation of
the Mexican government programme has not yet been published. It seems that not all systems are working
properly, depending on maintenance and availability of spare components. In spite of these problems, the model
has been successful in bringing large numbers of SHSs to customers, who cannot be reached by commercial
SHSs or grid electri®cation.
4.2. Cash sales
The main advantage of cash sales is its easy ®nancing, low transaction costs, and high ¯exibility in consumer
choice. Large (35±55 Wp) solar home systems can be paid for in cash only by higher-income households. Smaller (10±20 Wp) systems are affordable to larger groups of the rural population. A problem with cash sales can be
after-sales service, especially when the dealer lives in the city and the buyer in the countryside. In Kenya,
Zimbabwe and China almost all systems installed were bought on a cash basis. Survey results from different
regions in Kenya show that the operational status of systems is comparable to, or even slightly better than,
average with 10±21% of systems out of operation.22±24
In Kiribati, Paci®c Islands, experience with cash sales was less positive. National involvement with PV for
general rural electri®cation started in 1984 with the formation of the Solar Energy Company of Kiribati (SEC).
SEC sold PV systems and provided service on demand. The PV systems were sold for commercial prices, but
labour for technical support was offered at essentially no cost owing to USAID grants. In 1989 SEC was almost
bankrupt. A survey in 1992 showed that at that time less than 10% of 270 PV systems were more than marginally operational for the following reasons. The householders bought under-sized systems and cheap replacement components to save money. They were unable to install the systems properly in spite of the
availability of instruction material, and were unwilling to pay for professional installation at essentially no cost.
Householders did not recognise the value of preventative maintenance, and travel costs of a maintenance visit
Copyright # 2001 John Wiley & Sons, Ltd.
Prog. Photovolt: Res. Appl. 2001; 9:455±474
SOLAR HOME SYSTEMS IN DEVELOPING COUNTRIES
463
were higher than most users were willing to pay because of the low system density. In 1989, it was decided to
operate SEC as an Energy Service Company (ESCO).25,26
Cash sales account for an estimated two-thirds of the number of installed SHSs in developing countries, but
less than half of the world-wide installed capacity. The main organisational lesson learned is that systems paid
for in cash are liable to failure because there is a tendency to go for cheap, under-designed systems with
low-quality replacement components that are often not fully compatible with the system. There is a need for
standards for components and system designs. Furthermore, reliable after-sales service is required, to remedy
failures in system operation quickly.
4.3. Consumer credit
Negative experience with donations on the one hand and the need for ®nance on the other has resulted in a
search for other, more structural, delivery modes. The provision of credit has for some time been considered
essential for widespread deployment. With consumer ®nancing, (part of ) the funding for the solar home systems originates from sources outside the government budget, such as banks or private companies. An advantage
for the user is that the investment costs are spread over a number of years. This improves affordability for large
parts of the population.
Most credit facilities are somehow linked to external parties who provide either the seed ®nance for establishing a revolving fund or ®nancial guarantees, generally up to 100%. Without such support, local banks and other
®nancing institutions are often reluctant to provide loans for non-productive investments to the rural population,
which they generally perceive as a `non-bankable' group. This perception is based on dif®cult and costly credit
appraisal procedures, relatively high administrative costsÐdue to small loans, and frequent repaymentsÐand
lack of collateral.
A successful example was Sudimara in Indonesia, which sold about 7000 systems in 25 years on 4-year
credit terms.27 Service was provided through about 50 solar service centres. Personnel received a bonus
when fee collection was complete. However, continued growth was hampered by cash-¯ow constraints and the
business was stalled after the devaluation of the Indonesian Rupiah by a factor of three due to the ®nancial
crisis that began in 1997. This illustrates the vulnerability of credit schemes to unpredictable (external) ®nancial
shocks.
In Namibia, a government-subsidised credit scheme for SHSs did not substantially increase local demand.
The loans are provided from a revolving fund, set up by the Ministry of Mines and Energy, NORAD (Norwegian
Development Corporation), USAID (United States Agency for International Development). The plan is for
pay-back of the loans to replenish the fund for new energy technology loans, but given the subsidised interest
rates, the fund is likely to dry up in the long run. The impact of the credit facility has been limited. Between
1997 and 1999 less than 400 SHSs have been sold and installed. The main reasons for the limited uptake are
considered the high price of SHSs, the fact that SHSs are not able to meet all the household energy requirements, limited awareness and bureaucratic loan procedures. Nevertheless an evaluation showed that users were
generally satis®ed with their SHS.28
When compared with a rental scheme, 93% of the surveyed households in Namibia indicated a preference for
a credit facility, the underlying reason being that people like to own the asset they are paying for. Similar
®ndings were obtained in a rural household survey in Swaziland were 95% preferred a credit scheme to a rental
scheme. Those who preferred a rental scheme were expected to get a grid connection in the short run and
regarded the rental scheme as an ideal interim solution.28
In Guatemala, a credit scheme via an established micro-lender was unsuccessful, with unsatis®ed customers
complaining about low-quality products and lack of technical assistance to users (H. Arriaza, personal communication). No post-installation services were considered.
Lessons from early experience in 12 World Bank/GEF solar home system projects show that: `dealers are
reluctant to extend credit to rural customers with little credit history, and credit administration and collection
may be costly'.29 The overall impression is that provision of credit is certainly not a guarantee for rapid growth
in sales. Credit schemes can work reasonably well, provided good quality systems have been installed. The
Copyright # 2001 John Wiley & Sons, Ltd.
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F. D. J. NIEUWENHOUT ET AL.
repayment discipline is strongly related to the technical performance of the system. If the system doesn't work,
people stop their loan repayments.
4.4. Fee-for-service
The main advantages of the fee-for-service system are the spreading of costs to the user over a long period
(10 years or more), the usually easy access of the Energy Service Company (ESCO) to capital and the potential
for cost reduction through economies of scale (purchase costs, transaction costs, operation and maintenance
costs). Public utilities are used to operating on a fee-for-service basis, but, until now have not been very eager
to get involved in solar photovoltaics because of the high costs of rural electri®cation and their unfamiliarity
with this new technology which is different from grid electri®cation.
In Kiribati, the Solar Energy Company was more successful in maintaining user satisfaction after they
converted their operations to become a rural utility in 1989. The new utility sets up districts, with each district
of suf®cient size (50±125 systems) to be serviced by a SEC ®eld technician. The user pays an installation fee of
A$50 and a monthly fee of A$10±50 (depending on system size) to cover the actual cost of operation in full,
including battery replacement, and maintenance of the system. Every month, the ®eld technician collects the fee
and checks the equipment. Twice a year, a senior technician visits each district and audits the technician's
performance. Evaluation teams from the EU (in 1998) and from Japan (in 2000) reported that SEC has been
successful in both maintaining the systems and collecting the fees.
In the Dominican Republic, Soluz-Dominicana has been developing a fee-for-service model2 since 1996. In
an extensive test phase with 200 customers, the model was re®ned. It is stated that the model is now cash-¯ow
positive, with 1000 or more units.30 The same source mentions the following advantages of this model. SOLUZ
has established an excellent maintenance and after-sales service on the PV systems. Collection costs are low
because users must put the monthly fee in strong-boxes, located in prominent buildings. Local, independent
collection agents are rewarded when collection levels are high; they report credit problems to SOLUZ before
they are serious. SOLUZ has a credible repossession programme, in which non-payment leads to quick and
visible removal of the system. It is mentioned that the SOLUZ model is being replicated by SOLUZ af®liates
in other countries. However, it is also noted that the ®nancing of trials of the the model was made possible by the
personal efforts of the director of SOLUZ: entrepreneurs without the proper connections will ®nd it hard to use
this model. A more recent paper of Martinot et al. mentions that the company is approaching pro®tability with
an installed base of 5000 systems.29
In 1996, the Federal Government of Argentina started a rural electri®cation programme based on regulated
concessions, which have been granted in two provinces. In Jujuy, the private utility EJDESSA has installed
about 700 SHSs in a fee-for-service system. EJDESSA takes care of the supply, installation, and servicing
of the SHSs. The Provincial Government of Jujuy contributes an additional subsidy. As a result, the consumer
pays a monthly fee of only 4 US$. This is well within the estimated payment capacity of the users (US$10±15 a
month). In Salta, the ESCO that obtained the concession has signed contracts, but installed no systems up to
now because it has underestimated the installation and servicing costs.
We conclude that recent fee-for-service arrangements show opportunities to combine subsidies and market
operation. However, the experience with the fee-for-service system is still limited. The projects in Kiribati and
the Dominican Republic have demonstrated the viability of the service and maintenance schemes that were
designed in these projects. However, the main challenge for this model is to organise operation and maintenance
of the systems and fee collection in a ®nancially sustainable way, such that user contribution covers the costs for
the ESCO.
4.5. Conclusions
To summarise the experience with different delivery modes, we conclude that up to now it has not been
demonstrated that one of the four delivery modes is to be preferred for solar home systems. For each delivery
mode there are successful and unsuccessful case studies. The choice of delivery mode and the precise way it is
implemented depends on the institutional, legal, socio-economic and cultural conditions in the country.
Copyright # 2001 John Wiley & Sons, Ltd.
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Table II. Prices at household level for solar home systems
Country
Year
Indicative system
price (US$/Wp)
Dominican Republic31
Brazil32
Bolivia33
Peru34
Bangladesh35
Philippines36
Ghana37
Namibia28
Swaziland38
Botswana11
South Africa39
Zimbabwe40,41
India3
1989±1991
1994±1995
1995?
1995
1993±1997
1993±1994
1998
1997±1999
1997±1999
1997±1999
1995±1996
1997
1999
15
11±15
12
11±15
16
15
14
22
17
16
10
17
7±85
Notes
Including installation
Including installation
Cost price
Including installation
With subsidies: 3±4 US$/Wp
5. THE COST OF SOLAR HOME SYSTEMS
Over the period 1989±1999 reported retail prices for complete SHSs were in the range of US$7±22/Wp.
Price information is often dif®cult to compare, some sources include cost of installation, and others only
hardware. The generally prevailing perception is that the price of SHSs is decreasing. However, from the cost
data3,11,28,31±41 we have been able to collect (Table II) it is not possible to con®rm the expected reduction in the
price of PV hardware.
The underlying factors responsible for price differences could not be fully established from the available
material. To a certain extent the differences may be due to differences in duties and tax structures, which in
turn may be related to time or geography. In West Africa, for example, high duties and taxes on solar equipment
prevail, whereas in most countries in Southern Africa, solar equipment is exempt from duties. This however is a
rather recent phenomenon. In the early 1990s, the combined duties and taxes in Southern Africa were considerable: Zimbabwe 49%, Mozambique 49%, Malawi 43%, Swaziland 38%, Zambia 38%, Namibia 27%.42
In most projects, the cost of battery replacement, and the associated need for ®nance is not considered. The
consequences are re¯ected, e.g. in the project in Zacapa43 in Guatemala where the scope for battery replacement
is poor and hence many systems perform badly or not at all. A positive example is the NRECA approach44 in
Guatemala, where communities have created a solar fund that will be used to ®nance replacement of batteries.
The small monthly amounts contributed by the solar fund members are calculated in such a way that replacement can be made on time. For such a fund to function well, the administrators need to be highly trusted and
open to frequent checks by the fund members.
6. TECHNICAL FINDINGS
A suf®ciently high quality of solar photovoltaic system components is essential for a successful introduction of
solar electricity for household applications. Frequent failures, even of small and cheap components such as
¯uorescent tubes, will cause user dissatisfaction that will quickly lead to reduced motivation to continue repaying the fees if the system was not sold for cash. Well-designed systems with suf®cient product quality are essential to make credit schemes or fee-for-service systems ®nancially viable.45±50
We have obtained information on systems with PV module capacities between 10 and 110 Wp. There is a
clear peak in the number of projects using PV modules in the range of 45±54 Wp. This appears to be determined
by choices made by project planners. Where users have suf®cient choice, such as in Kenya, a large range of
system sizes is encountered.
Copyright # 2001 John Wiley & Sons, Ltd.
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F. D. J. NIEUWENHOUT ET AL.
Table III. Overview of status of solar home systems for a few reported cases (numbers are percentages of investigated
systems)
Country
Good
Partly non-operational
Kenya
Kenya22
Kenya24
Tunisia20
India, Sundarbans51
India, Urjagram52
India, Ladakh (Leh)53,54
India, Kargil53
Guatamale, Zacapa14
Mexico55
Kiribati
Swaziland56
Nepal57
69
60
77
38
72
12
30
02
37
26
Total
58
23
71
76
73
60
51
96
55
< 10
27
21
17
19
40
Non-operational
19
10
21
25
02
49
02
04
45
03
> 90
10
Year of publication
1998
1996
2000
1999
2000
1993
1998, 1999
1998
1999
2000
2001
1995
23
6.1. Overall performance
Only from a few projects and countries,14,20,22±24,51±57 could information be obtained on the operational status
of SHSs (Table III). It should be noted that the ®gures have to be interpreted carefully, since different methodologies have been used to assess system quality. Also, the lifetimes of systems in the ®eld differ widely. For
example, in the case of the Rama Krishna Mission project in the Sundarbans, India,51 the systems were installed
less than a year before the data were recorded. Their excellent performance is therefore no surprise.
From Table III it can be concluded that, in the deployment activities for which information could be obtained,
almost a quarter of the systems are no longer working, and an additional ®fth of the systems are only partly
operational. Batteries and ¯uorescent lights are the two components that cause most technical problems. A
warning is required: one should not casually generalise these ®gures since they represent project of various ages
and delivery modes. Possibly there is a positive trend since recently distributed systems are supposed to be
better than those distributed a decade ago. However, we could not detect any trend in the ®gures. To put the
®gures in a broader perspective one should compare them with the quality of similar services, e.g. grid
availability in rural areas, which is often very low.
The ®gure for the number of non-operating systems should not be interpreted as being all `written-off'!
Non-functioning lights and failed batteries that will be replaced as soon as the required cash is available, mean
only temporary unavailability of service. But the message is clear: there is still a lot of scope for improving the
quality of systems, installation and after-sales services. Continued quality enhancement is crucial to accelerate
the introduction of SHSs and to make solar PV a universally accepted practical option for rural electri®cation.
6.2. Field experience with the quality of PV modules
Solar photovoltaic modules are the least problematic component of solar PV systems. Some degradation in
output of crystalline silicon modules is reportedÐabout 8% over 3 years in Brazil,58 and 1% per year in
Kenya.59 Output degradation was a serious problem with amorphous silicon modules in the past. However,
recent ®eld tests show that the quality of amorphous silicon modules has improved. In a project in Kenya,
I±V measurements were conducted in 145 homes and 14 test ®eld installations, of 5 different amorphous silicon
modules of 3 brand types that have been in the ®eld between a few months and 10 years. When measured power
of the amorphous silicon modules was compared to rated power, one module produced 83% of the 12 Wp rating,
two types of one brand produced 88% and 89%, and two other modules of one brand produced 61 and 55% of
rated power. This compares to a sample of 17 crystalline modules where measured power was about 87%
of rated power. It can be concluded that the good brands of amorphous silicon modules have a similar output
to that of crystalline modules.59
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6.3. Charge regulators
Suf®cient evidence was found in Mexico to conclude that malfunctioning battery charge regulators and regulators with improperly set disconnect/reconnect voltage values, are often the cause of failed batteries. Most
battery charge regulators in the installations surveyed have an override switch which allows the user to reconnect the load manually after a low-voltage disconnect. About 21% of the battery charge regulators were found
with this switch in the manual position. In earlier models of charge regulators, design engineers included the
override switch. On ®nding that this switch was an invitation to system abuse, it was banned in later
projects.60
Charge controllers make up only a small fraction (about 5%) of the cost of a solar home system. However,
their proper operation is expected to guarantee a suf®ciently high battery lifetime, although this could not be
supported by ®eld data. Inadequate user training often leads to bypassing the charge controller.61 Some
advanced controllers have special features to enhance battery lifetime (boost charging and pulsed charging)
or improve charging ef®ciency (pulse-width modulation). No ®eld test results could be obtained to support these
claims of prolonged lifetime. New and sophisticated types of controllers are often claimed to improve the
performance of systems and battery lifetime. However, present experience is inconclusive. Good results
are often obtained with well-built, but rather simple controllers.62
6.4. Battery quality
It is not always realised that batteries are usually by far the most expensive part of a solar home system over the
lifetime of the system. Lifetimes of batteries vary considerably from project to project, from less than 1 year to
more than 4 years. Usually, ordinary car batteries are applied which typically survive for only 1±3 years in a
solar home system (R. van der Plas, personal communication; M. Hankins, F. Omondi, B. Osawa, R. van der
Plas, unpublished note). In Sukatani in Indonesia, locally produced automotive batteries last less than 10%
longer than the initially installed batteries that were designed for solar application.63 In Argentina, 85% of
tubular plate batteries were still operational after 35 years.64
Sizing of the battery, sizing of the PV module, and battery maintenance, are the most relevant aspects
determining battery lifetime.65,66 In Indonesia, locally produced batteries had substantially lower capacities
than those speci®ed by the manufacturer.67 Based on a sample of 555 batteries, a rule of thumb was formulated
that, for Mexico, the battery capacity should be at least 75 times the daily load in A h.60
6.5. Lighting
Lighting is the most common application of SHSs. In India, the term `domestic lighting system' is also used
when a television set is powered. Lighting with solar PV provides cash savings on fuels such as kerosene. In
those cases where SHSs are used for (indirect) productive applications, it usually involves lighting. Lights are
often provided as an integral part of a SHS.
The quality of lighting can vary considerably between more or less comparable lamp types. One lamp can
have a ten times higher failure rate than a similar type. A problem in maintaining lighting quality is the
relatively small market for 12-V lamps. If a lamp breaks down, the user will always regard the whole system
as damaged. Therefore, lighting ®xtures used in SHSs should be as reliable as the rest of the system.
It was found that the number of lights required per system differs widely in different projects. It is clear that
household demands are not equal. Programmes should allow for these large differences between the demands of
users.
6.6. Standards
Some countries have standards for equipment to be included in national SHS programmes. International
standards are promoted by PV-GAP and the World Bank. It is common to expect that imposition of standards
will lead to higher product quality in the market and increased user satisfaction. We also expect this to be the
case. However, no clear relation could be established from the ®gures in Table III. For example in India, SHSs
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are subject to tests of the Solar Energy Centre to become eligible for inclusion in subsidised government
programmes. On the other hand, in Kenya no such standards apply to commercially distributed systems.
However, in both countries a similar fraction (about two-thirds) of installed systems are in good order. This
shows that, at least for the moment, factors other than standards appear to be more important in determining
how well systems operate after some time.
6.7. Conclusions
There are still many remaining technical problems with PV systems for households. Quality aspects still do not
receive suf®cient attention. Improved charge regulator designs can contribute by protecting batteries. Design
changes need to be based on ®eld experience and feedback from users in different countries.
7. EVALUATION OF USER EXPERIENCE
7.1. Socio-economic background of solar PV users
Although most government programmes focus on poor households in remote villages, there are still a lot of
users in urban and peri-urban areas. Incomes of SHS users are usually higher than average. When comparing
system price (cost for the user) and income, large variations appear. While in Namibia68 a 50 Wp PV system
accounted for slightly more than one-tenth of the annual income of the average user, in Nepal69 SHSs
commonly cost between half and one-quarter of annual income. Within the relatively small area of Swaziland,70
the whole range of costs relative to income is encountered. Although the costs of PV systems were generally
around one-tenth of annual income, for rural teachers, one of the common groups of users, costs amounted
to 4±6 months' salary.
In Southern Africa the use of car batteries in unelectri®ed areas is common. For example in Swaziland 31% of
the SHS users already had a battery and television set.70 Many obtain their systems via relatives with jobs in
towns or abroad.
7.2. Energy demand
Most SHSs are used for lighting. Better quality and less dangerous operation compared with conventional
lighting options, such as candles and paraf®n lamps, is the most important reason for people to buy a
SHS.14,68,71 However, lights are not always attached to the PV system. Research results in Swaziland70 show
that 18% of SHS users did not use the system for lighting. Television is given a higher priority than lighting in a
signi®cant part of the SHS market. Most SHSs in the 35±55 Wp range are delivered with two or three lights.
However, the number of lights actually required may be higher. Small orientation lights are often installed later
by the users themselves. Outdoor lighting is sometimes highly valued.
Although lighting is the most common application, access to television provides a strong incentive for
obtaining a SHS. Black-and-white television sets are gradually being replaced by 12-V colour sets. For radios,
the added value of solar PV is often small, as voltages may not match. Surveys show continued use of small
disposable batteries for radios and cassette players.
7.3. Energy service provided
User requirements vary widely, but a common ®nding is that users with larger systems are generally more
atis®ed with their systems. Appliances can be used for longer periods of time, and the systems are more reliable,
owing to less frequent deep discharge of the battery.72 In most programmes the choice of PV module capacity is
small. In commercial markets, the evidence shows that there is a demand for a range of sizes to meet the
demands of different users.
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It has been found that users do accept systems of lower quality and performance in an open market where the
relation between price and quality is clear. In Senegal,73 user groups of systems without controllers and with
higher quality but higher price were both satis®ed with their PV systems.
Maintenance and service are often underestimated in terms of costs and effort required. One of the frequently
recurring complaints of PV users is the absence of a (functioning) maintenance and service scheme, or the cost
of such a service.
7.4. User awareness and understanding of the system
Knowledge of the existence of solar electricity is sometimes high. About half of the unelectri®ed population in
Namibia and Lesotho know what PV is. In Lesotho, 74% learned about SHSs by seeing a system in the
neighbourhood or at friends, and 15% via radio. This illustrates the importance of the demonstration effect
of well-functioning systems.31
User satisfaction depends on both understanding and expectations. If people are accurately informed on the
possibilities and limitations of a SHS, they know what to expect and can make an informed judgement whether
or not to buy a SHS. Such people are generally more satis®ed with their system than those who were promised
`heaven on earth'74,75
7.5. Ability and willingness to pay
In projects with cash sales and credit facilities it was found that the credit facility increases the ability to pay. A
down-payment acts as a rough selection mechanism. Repayment of the loan strongly depends on user satisfaction. Credit instalments can be seen as a guarantee mechanism, as users commonly stop paying if the system
does not function.
7.6. Income generation
Although developmental objectives such as opportunities for income generation are often mentioned as reasons
for rural electri®cation with PV, there is only limited evidence of the impact of SHS on income generation. The
available evidence shows that the use of the electricity provided by PV for income generation is indirect: examples are mentioned of extended sales hours of local stores and bars, sewing or knitting under PV light in the
evening (but with manually powered machines). Also the attraction of tourists is mentioned. In Nepal, 12% of
interviewed SHS users even mentioned income generation by attraction of tourists as a perceived advantage of
SHS.76 Responses to a recent FAO study on the impact of PV systems for rural development indicate that
PV systems do have an impact on productive activities and handicrafts in the evening and longer opening hours
of shops for approximately 30% of respondents.77
The availability of high-quality light in the evening makes it possible to cook or perform other domestic
activities, allowing more time for income-generating activities during the day. This effect is stronger on women
than on men. In southern Africa (Botswana, Namibia, Zimbabwe, Swaziland, Lesotho) the reported effects are
small.68,70 In West Africa, more in¯uence on income generation is noted, with up to 10±15% of PV systems
being used for indirect income generation in Ghana according to a recent inventory.37
8. CONCLUSIONS
Our literature survey was hampered by a lack of documentary information on actual experience of households
with solar home systems. Relatively few projects and programmes have been monitored, and not all of the
results are accessible. Those studies that were available usually deal with the ®rst 1±2 years of the project, while
information over longer periods of time is more relevant to conclusions regarding lifetime of equipment and
sustainability in general. Negative experiences are seldom narrated. These methodological problems make the
interpretation of some of the numerical results dif®cult. However, we are con®dent that none of the qualitative
®ndings would have been greatly different. The main conclusions are detailed below.
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8.1. Lack of information on user experience
The main conclusion is that there is not enough information available about the performance of solar home
systems and projects. Hundreds of SHSs projects have been conducted in the past few years. For a considerable number of these, descriptions of the organisational set-up exist, but only very few studies describe in
some detail how SHSs are actually used by households. Some early successes might have given the impression that everything is running well and there is no need to spend time and money at this stage on further
research. But relatively high failure rates, even in some recent projects, prove that there is still scope for
improvement. More information is required to organise better deployment activities, to decrease the default
rate in credit schemes, and to improve the quality of hardware and installation of systems. To increase
insights into the use of solar PV in households, monitoring and evaluation activities are required, using as
their main instruments household surveys and data loggers. Monitoring needs to be continued after the
installation stage of the project.
8.2. Service infrastructure
Establishing a viable distribution and servicing infrastructure appears to be one of the weakest parts in
the deployment chain for SHSs at the moment. There are very few entrepreneurs who are willing to take the
risk of establishing a solar PV distribution and servicing company. Strengthening this infrastructure is
necessary, for example by supporting human resource development in small- and medium-scale enterprises.
A ¯exible instrument needs to support existing entrepreneurs in receiving training to manage companies, advise
on selecting a product and service range, and ®nancial support for investments in stock and establishing
service stations.
8.3. Possible negative impact of subsidies
In countries with a commercial market for solar PV systems for households, extreme care is required in using
hardware subsidies to support deployment of PV systems. Subsidies can distort markets by providing unfair
competition, especially to small start-up companies in production and distribution. Subsidies will be most
effective when used to support entrepreneurs in establishing a distribution and service infrastructure, to support
training programmes and contribute to the cost of promotion and awareness creation. To limit possible negative
effects on local production of BOS components, hardware subsidies can best be directed to the module only, and
should have a ceiling determined by price differences on the local market.
8.4. Limited choice of system size
Projects supporting a single type of solar home system should be avoided as far as possible. The largest density
of PV systems in an area can be attained if people have a choice between different systems. It is especially
important to include smaller module capacities in the range of 10±30 Wp. Including solar lanterns and solar
battery charge stations in solar home system projects can enhance the viability of a distribution and servicing
infrastructure. User preferences concerning the number and location of lights, and suitability for other appliances, must be taken into account.
8.5. Different modes of deployment
Institutional models for the deployment of solar home systems are often exclusive. In a limited geographical
area, the private sector market usually fails to ¯ourish if similar systems are distributed in government
programmes with heavy subsidies. Often, existing successful programmes have undergone a historical development and are consequently better suited to local conditions. Under these circumstances it can be preferable
for external support to focus on strengthening existing programmes than to support completely new activities
that compete with existing programmes.
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8.6. Fee-for-service
The fee-for-service system is a promising mechanism from a sustainability point of view, because of the
inherent incentives for project implementers to maintain a suf®ciently high quality level of services over a long
period of time. However, there is still too little information available about operation of fee-for-service schemes.
Careful monitoring and evaluation of fee-for-service systems in different countries can contribute to making it a
success.
8.7. Credit schemes and small systems
Credit schemes are useful to improve affordability and thereby increase access of middle-income households.
An alternative way to reach this consumer group can be the use of smaller, modular systems. Monitoring and
evaluation of solar home systems that are sold as separate components instead of in complete kits will contribute
to more information about the characteristics of this market, allowing for design of better products and more
ef®cient marketing. Replacements and maintenance must be affordable and available to users.
8.8. Component failure
Batteries and ¯uorescent lights are the two components with the most frequent failures in solar home systems.
Protection of the battery can be enhanced by improved charge regulators, which are currently of simple design.
Also, the quality of the production process is often low. To enhance product quality, improved designs of standalone DC±AC inverters, ¯uorescent light inverters and charge regulators need to be developed. Companies may
need assistance to improve their production processes through training and support in establishing joint ventures.
8.9. Market transparency
Markets are not suf®ciently transparent at the moment. Good products are available, but users need information
to make their choices on the basis of knowledge of the price±quality ratio. The role of users needs to be strengthened by empowering them, for example by having independent consumer organisations compare the different
products on the market.
8.10. System requirements
Countries with government support for solar home systems often apply criteria for systems and components to
become eligible for inclusion in donor programmes. However, we could not obtain evidence that systems in
countries with these requirements perform better than systems in countries without them. Field monitoring,
complemented by laboratory tests is required to achieve a stronger feedback of experience of actual quality
in the ®eld, with a view to formulation of standards and requirements by national governments as well as
IEC and PV-GAP.
Acknowledgements
This work was sponsored by the Netherlands Agency for Energy and the Environment, Novem, under contract
number 146.610-401.1. Novem funded about 65% of the cost. The remainder was funded by the Netherlands
Energy Research Foundation, ECN.
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