IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v210y2026ics0301421525005658.html

Determining the impact of future load compositions on cost-reflective tariffs and monthly electricity bills in a rural solar PV mini-grid

Author

Listed:
  • Gelchu, Milky Ali
  • Ehnberg, Jimmy
  • Shiferaw, Dereje
  • Ahlgren, Erik O.

Abstract

Renewables-based mini-grids can significantly increase electricity access in rural, non-electrified areas. Despite their potential, mini-grid deployment has been slower than expected due to low profitability in areas with initially low demand. Tariff settings that would improve profitability are challenging due to uncertainty of future demand. While previous studies have explored how tariff settings affect demand and how productive use increases profitability, the impact of load compositions on cost-reflective tariffs and users' bills remains unexplored. This study determines the impact of future load compositions on cost-reflective tariffs and monthly electricity bills in a rural solar PV mini-grid. By combining a case with an already installed solar PV-based mini-grid with spare capacity for future demand evolution and three future load composition scenarios, the study calculates cost-reflective tariffs under five different tariff structures (fixed energy, fixed and variable, time-of-use, power, and hybrid) and users monthly bills using the calculated cost-reflective tariffs. The results show that future load compositions significantly impact cost-reflective tariffs and monthly bills, with the effect depending on the tariff structure. Power-based tariffs show a higher reduction compared to energy-based tariffs for load compositions dominated by daily productive uses. The impact on bills for lower-usage households is significant.

Suggested Citation

  • Gelchu, Milky Ali & Ehnberg, Jimmy & Shiferaw, Dereje & Ahlgren, Erik O., 2026. "Determining the impact of future load compositions on cost-reflective tariffs and monthly electricity bills in a rural solar PV mini-grid," Energy Policy, Elsevier, vol. 210(C).
    • Handle: RePEc:eee:enepol:v:210:y:2026:i:c:s0301421525005658
    DOI: 10.1016/j.enpol.2025.115058
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421525005658
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2025.115058?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Moner-Girona, M. & Solano-Peralta, M. & Lazopoulou, M. & Ackom, E.K. & Vallve, X. & Szabó, S., 2018. "Electrification of Sub-Saharan Africa through PV/hybrid mini-grids: Reducing the gap between current business models and on-site experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 1148-1161.
    2. Khezri, Rahmat & Mahmoudi, Amin & Whaley, David, 2022. "Optimal sizing and comparative analysis of rooftop PV and battery for grid-connected households with all-electric and gas-electricity utility," Energy, Elsevier, vol. 251(C).
    3. Yunusov, Timur & Torriti, Jacopo, 2021. "Distributional effects of Time of Use tariffs based on electricity demand and time use," Energy Policy, Elsevier, vol. 156(C).
    4. Gelchu, Milky Ali & Ehnberg, Jimmy & Shiferaw, Dereje & Ahlgren, Erik O., 2023. "Impact of demand-side management on the sizing of autonomous solar PV-based mini-grids," Energy, Elsevier, vol. 278(PA).
    5. Herbert, Caren & Phimister, Euan, 2019. "Private sector-owned mini-grids and rural electrification: A case study of wind-power in Kenya's tea industry," Energy Policy, Elsevier, vol. 132(C), pages 1288-1297.
    6. Klug, Thomas W. & Beyene, Abebe D. & Meles, Tensay H. & Toman, Michael A. & Hassen, Sied & Hou, Michael & Klooss, Benjamin & Mekonnen, Alemu & Jeuland, Marc, 2022. "A review of impacts of electricity tariff reform in Africa," Energy Policy, Elsevier, vol. 170(C).
    7. Wassie, Yibeltal T. & Ahlgren, Erik O., 2024. "Understanding the load profiles and electricity consumption patterns of PV mini-grid customers in rural off-grid east africa: A data-driven study," Energy Policy, Elsevier, vol. 185(C).
    8. Stergios Emmanouil & Jason Philhower & Sophie Macdonald & Fahad Khan Khadim & Meijian Yang & Ezana Atsbeha & Himaja Nagireddy & Natalie Roach & Elizabeth Holzer & Emmanouil N. Anagnostou, 2021. "A Comprehensive Approach to the Design of a Renewable Energy Microgrid for Rural Ethiopia: The Technical and Social Perspectives," Sustainability, MDPI, vol. 13(7), pages 1-22, April.
    9. Mugisha, Joshua & Ratemo, Mike Arasa & Bunani Keza, Bienvenu Christian & Kahveci, Hayriye, 2021. "Assessing the opportunities and challenges facing the development of off-grid solar systems in Eastern Africa: The cases of Kenya, Ethiopia, and Rwanda," Energy Policy, Elsevier, vol. 150(C).
    10. Come Zebra, Emília Inês & van der Windt, Henny J. & Nhumaio, Geraldo & Faaij, André P.C., 2021. "A review of hybrid renewable energy systems in mini-grids for off-grid electrification in developing countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    11. Goutam Dutta & Krishnendranath Mitra, 2017. "A literature review on dynamic pricing of electricity," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(10), pages 1131-1145, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duccio Baldi & Magda Moner-Girona & Elena Fumagalli & Fernando Fahl, 2022. "Planning sustainable electricity solutions for refugee settlements in sub-Saharan Africa," Nature Energy, Nature, vol. 7(4), pages 369-379, April.
    2. Ndiritu, S. Wagura & Engola, Monica Katungi, 2020. "The effectiveness of feed-in-tariff policy in promoting power generation from renewable energy in Kenya," Renewable Energy, Elsevier, vol. 161(C), pages 593-605.
    3. Namujju, Lillian Donna & Acquah-Swanzy, Henrietta & Ngoti, Irene F., 2023. "An IAD framework analysis of minigrid institutions for sustainable rural electrification in East Africa: A comparative study of Uganda and Tanzania," Energy Policy, Elsevier, vol. 182(C).
    4. De Angelis, Paolo & Tuninetti, Marta & Bergamasco, Luca & Calianno, Luca & Asinari, Pietro & Laio, Francesco & Fasano, Matteo, 2021. "Data-driven appraisal of renewable energy potentials for sustainable freshwater production in Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    5. Anvari, Simin & Medina, Alejandro & Merchán, Rosa P. & Hernández, Antonio Calvo, 2025. "Sustainable solar/biomass/energy storage hybridization for enhanced renewable energy integration in multi-generation systems: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 223(C).
    6. Wu, Yuezi & Wanume, Alex & Modi, Vijay, 2026. "Leveraging load shedding and daytime loads to improve mini-grid economics," Energy Policy, Elsevier, vol. 209(PB).
    7. Jeuland, Marc & Babyenda, Peter & Beyene, Abebe & Hinju, Gabriel & Mulwa, Richard & Phillips, Jonathan & Zewdie, Samuel A., 2023. "Barriers to off-grid energy development: Evidence from a comparative survey of private sector energy service providers in Eastern Africa," Renewable Energy, Elsevier, vol. 216(C).
    8. Mehrdad Aslani & Hamed Hashemi-Dezaki & Abbas Ketabi, 2021. "Reliability Evaluation of Smart Microgrids Considering Cyber Failures and Disturbances under Various Cyber Network Topologies and Distributed Generation’s Scenarios," Sustainability, MDPI, vol. 13(10), pages 1-30, May.
    9. Simon Kinyua Njeru & Dr. Robert Mang’ana & Dr. Enos Anene, 2025. "Strategy Implementation and Performance of Manufacturing Pharmaceutical Companies in Kenya," Journal of Business and Strategic Management, CARI Journals Limited, vol. 10(5), pages 36-62.
    10. Ndukwe Henry Ibiam & Fadi Kahwash & Jubaer Ahmed, 2025. "Priority Load Management for Improving Supply Reliability of Critical Loads in Healthcare Facilities Under Highly Unreliable Grids," Energies, MDPI, vol. 18(6), pages 1-25, March.
    11. Ashraf K. Abdelaal & Elshahat F. Mohamed & Attia A. El-Fergany, 2022. "Optimal Scheduling of Hybrid Sustainable Energy Microgrid: A Case Study for a Resort in Sokhna, Egypt," Sustainability, MDPI, vol. 14(19), pages 1-13, October.
    12. Antoine Boche & Clément Foucher & Luiz Fernando Lavado Villa, 2022. "Understanding Microgrid Sustainability: A Systemic and Comprehensive Review," Energies, MDPI, vol. 15(8), pages 1-29, April.
    13. Cecilia POGGI & Emmanuel Ramaholimihaso, 2024. "Energy and social protection measures for energy poverty," Working Paper a6ce163e-9e52-4758-b514-7, Agence française de développement.
    14. N. Bora Keskin & Yuexing Li & Nur Sunar, 2025. "Data-Driven Clustering and Feature-Based Retail Electricity Pricing with Smart Meters," Operations Research, INFORMS, vol. 73(5), pages 2636-2660, September.
    15. Zoran Gligorić & Svetlana Štrbac Savić & Aleksandra Grujić & Milanka Negovanović & Omer Musić, 2018. "Short-Term Electricity Price Forecasting Model Using Interval-Valued Autoregressive Process," Energies, MDPI, vol. 11(7), pages 1-17, July.
    16. Yang, Shiyu & Oliver Gao, H. & You, Fengqi, 2022. "Model predictive control for Demand- and Market-Responsive building energy management by leveraging active latent heat storage," Applied Energy, Elsevier, vol. 327(C).
    17. Usman, Muhammad & Balsalobre-Lorente, Daniel, 2022. "Environmental concern in the era of industrialization: Can financial development, renewable energy and natural resources alleviate some load?," Energy Policy, Elsevier, vol. 162(C).
    18. Zatsarnaja, Junianna & Reiter, Katharina & Mohnen, Alwine & Nordfjærn, Trond, 2026. "Nudging grid-friendly electric vehicle charging: Different shades of social framing and the power of individual factors," Ecological Economics, Elsevier, vol. 240(C).
    19. Best, Rohan, 2023. "Assets power solar and battery uptake in Kenya," Energy Economics, Elsevier, vol. 123(C).
    20. Mahmoud H. Elkholy & Tomonobu Senjyu & Mohammed Elsayed Lotfy & Abdelrahman Elgarhy & Nehad S. Ali & Tamer S. Gaafar, 2022. "Design and Implementation of a Real-Time Smart Home Management System Considering Energy Saving," Sustainability, MDPI, vol. 14(21), pages 1-22, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:210:y:2026:i:c:s0301421525005658. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.