Efficiency for access: the role of high-performing appliances as a potent catalyst for scaling energy access in off-grid areas

Energy efficiency plays a key role in improving energy access. With high-performing or more efficient appliances, off-grid energy systems providers could be able to serve more off-grid areas, expanding electricity access. However, private companies require accounting for reliable information about the level of energy consumption of newly electrified communities. This data is not always available and increases the risk perception of potential investors looking for customers who consume enough electricity to guarantee the company's revenues. In this paper, we use the case of La Guajira, Colombia, to understand consumer demand and preferences for off-grid appliances and to develop estimates of electricity-consuming appliance ownership. Using cross-sectional data of 1255 rural households, we first identify the appliances driving the monthly electricity consumption. Then, we implement an econometric diffusion analysis to explore the influence of socioeconomic factors (i.e. income, electricity access rate, and percentage of rural population) on the ownership of selected appliances. Finally, we estimate the electricity demand savings when energy efficiency improvements are incorporated into selected appliances. Our results indicate that TVs are the most commonly used devices in about 70% of rural households of La Guajira, followed by blenders, fans, and refrigerators. In particular, the level of electricity access and the index of rurality of the community show the highest statistical significance and collectively explain 91% variance in refrigerator ownership. Also, replacing current inefficient light bulbs and refrigerators with high-performing appliances could reduce the monthly electricity consumption of rural households in La Guajira by about 58%. These results provide evidence of the size of the addressable market for off-grid appliances in La Guajira and the need to implement energy efficiency measures for specific appliances. Stimulating refrigerator ownership could serve as a policy measure to maintain levels of energy demand, which could impact companies' revenues, and thus, electrification investments could grow within the unelectrified off-grid areas. Overall, our results are of interest not only to off-grid energy providers seeking to guarantee revenues but also to policymakers working on defining energy efficiency interventions in rural areas as a booster of achieving higher levels of electricity access in developing countries.