Solar microgrids in rural India: Consumers' willingness to pay for attributes of electricity

Abstract This paper assesses consumer valuation of different attributes of electricity supply to elucidate the conflict between solar microgrids and the centralized utility grid in India, as well as to provide insight into supporting government policies and structures. The study contributes significantly to the understanding of the role of microgrids in complementing a centralized system and its value as a sustainable energy solution for development. Electricity reliability, power, price, and hours availability are studied through a choice experiment, a method uniquely able to disaggregate the willingness to pay for each attribute. Household surveys were carried out in 22 villages across 4 districts in the state and covering a total of 216 households. Results indicate that consumers value (in order of strength of preference) electricity power, reliability, and price. Further, despite 9.4 h of electricity supply per day from the main grid, as compared to an average of only 7.2 h from microgrids, the respondents exposed to both systems were almost twice as satisfied with the microgrid's reliability. Based on these findings, the study provides four policy recommendations for strengthening the rural electricity supply sector and enhancing electricity access in India.