Household energy poverty amidst large-scale electrification: Impacts of grid reliability and off-grid solar technologies

This study examines the dynamics of household energy poverty amid the large-scale expansion of electrification using rich panel surveys from Ethiopia, one of the fastest electrifying countries. We construct a multidimensional measure of energy poverty that captures the availability, affordability, and acceptability of modern energy services using both subjective and objective weighting methods. The study also contributes to the literature by exploring the role of grid-reliability and off-grid solar technologies on energy deprivation and the possible channels at play. The fixed-effects-instrumental variable and Difference-in-Difference approaches are applied to estimate the causal relationships. Our findings reveal that, despite substantial progress in electrification, household energy poverty remains persistently high, with notable disparities among different socio-economic groups. Cooking-related deprivations are the main source of energy poverty. Improving the grid reliability can substantially help address energy poverty, mainly by promoting formal grid-connections and appliance ownership. The adoption of off-grid solar solutions also tends to mitigate rural energy poverty by improving deprivations in lighting and other end-use dimensions (mainly phones). Our results remain robust across alternative indicators. Overall, energy-related interventions should focus on promoting clean cooking solutions and ensuring a reliable electricity supply alongside grid extensions to fully realize the potential of electrification in reducing energy poverty.