Solar Home Systems: PRICING

Solar Home Systems are the least cost method of houshold lighting and electricity. Rural households that currently use kerosene lamps for lighting and disposable or automotive batteries for operating televisions, radios, and other small appliances comprise the principal market for Solar Home Systems. Families are spending up to thirty dollars per month on home energy services, depending primarily on income levels and fuel prices. A 1993 World Bank study from a dozen countries found that the average monthly expenditure for lighting and entertainment communications alone ranges between $2.30 for low income families, to $17.60 for upper income families.

These expenditures are similar to the monthly cost of a SHS, which SELF approximates on a general world-wide level at $10 per month. A family in the middle, or upper-income brackets could have an SHS for less than they are already currently spending for energy services.

Comparisons between the different sources should also be made in terms of lighting-services provided per dollar. Because a SHS includes highly efficient compact fluorescent lights (CFL), it can provide lighting services for a lower cost per unit of light delivered.

A family using 6 kWh per month to power 9 watt CFLs would need over 30 kWh to receive the same amount of light from 60 watt incandescent bulbs. The average 50 Wp SHS provides approximately 200 watt hours a day, or six kilowatt-hours (6 kWh) per month. Based on the price of SHS components, and cost of relative fuels in its country markets, SELF estimates that using 8 watt fluorescent lights generating 400 lumens, a $500 SHS can provide high quality lighting at an average cost of $7.15 per million lumen-hours. For a diesel generator lighting 60W incandescent bulbs, this figure is $28.77 per million lumen-hours. A kerosene lamp can provide lighting at $400 per million lumen-hours.

To judge accurately the affordability of Solar Home Systems in rural areas, one must look not only at comparative lighting costs and how much families are already paying for energy services, but how much more they would be willing to pay for electricity from a Solar Home System. While a simple price comparison is useful in showing that PV is comparable to existing household expenditures for lighting, and the least-cost means of delivering household lighting, it does not convey the higher value placed on electricity over kerosene lighting, or the environmental benefits of solar-based electrification.

A study for the U.S. government calculated that the gasoline equivalent of the energy saved over the lifetime of one 24-watt compact fluorescent bulb is sufficient to drive a Prius from New York to San Francisco.