Analytics on Pricing Signals in Peer-to-Peer Solar Microgrids in Bangladesh

Sebastian Groh, Eshrat Waris, Annette Werth, and Christian Zürpel

Economics of Energy & Environmental Policy, 2022, vol. Volume 11, issue Number 1

Abstract: Solar microgrids enabling peer-to-peer energy exchange among off-grid households are poised to contribute to electrifying rural areas in the Global South. This novel approach provides underserved communities with affordable, green and reliable energy access, capable of powering higher-tier consumer as well as productive-use appliances. To ensure these microgrids can be run sustainably, this paper seeks to provide some initial answers on how to improve on the prevailing static pricing approach. Piloting variations in the buy and sell prices for electricity in several solar microgrids in rural Bangladesh, we find that making electricity much cheaper did not lead to observable shifts in customer behavior. Rendering feeding into the microgrid much more lucrative for prosumers, customers who sell electricity to as well as purchase it from the microgrid, produced inconclusive results. Anecdotal evidence of consumption smoothing in a microgrid with decreased buy-prices and of increased pick-up by customers with many appliances points to potential benefits from adjusting buy prices to daily and seasonal supply peaks and troughs. Failure of increased sell-prices to induce more prosumer energy feed-in may furthermore motivate new thinking on current passive trading regimes, which give preference to matching geographically close supply and demand and thus disadvantage individual prosumers.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2022
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