Solar-Based Rural Electrification Policy Design: The Renewable Energy Service Company (RESCO) Model in Fiji
15 Pages Posted: 29 May 2012
Date Written: May 29, 2012
Solar photovoltaic technologies have for some time been promoted as a cost effective means of rural electrification in developing countries. However, institutional structures resulting in poor maintenance have adversely affected the sustainability of past solar projects. In Fiji, the Renewable Energy Service Company (RESCO) program is the latest attempt to promote solar-based rural electrification in a fee-for service model, aiming to remove the high upfront capital costs associated with solar technologies and using a public private sector partnership for maintenance. This paper assesses the program using survey and interview data. Major flaws are identified, relating to incorrect treatment of principal-agent problems, information asymmetries, motivational problems, and resourcing of government agencies. General lessons for fee-for-service solar home system models emerge, including that incentives for stakeholders must take centre stage in designing and administering such programs, and that active government support and ownership are required to make programs sustainable.
Keywords: SHS, Solar home systems, Solar, Rural electrification, Fiji, Small island developing states (SIDS)
JEL Classification: Q42, Q48
Suggested Citation: Suggested Citation