Government support

8.16 Despite the various initiatives of the private sector, NGOs, and donors in dissemination of solar home systems, governments still have a major role to play in PV market development. Governments can best support the deployment of solar home systems by focusing on:

8.17 A Demand-Driven Approach to Rural Energy Planning. Solar home systems are only one of many options that complement traditional central grid extension and meet the energy needs of rural populations. The choice of system should be based on the technology's ability to provide the most economical service consistent with energy needs such as lighting or power in household appliances or meeting commercial and industrial loads. The choice should also reflect the willingness of customers to pay for services. The process should also allow rural energy services to be delivered through a range of institutions, including public and private sector agencies, local cooperatives, and NGOs. Governments that invest directly in PV equipment for education, health, and other social programs can encourage further use of solar energy through visible demonstration of the technology's benefits. Governments can also facilitate access to credit lines, loan guarantees, and other financing mechanisms.

8.18 Institutional and Regulatory Frameworks. Governments should ensure a transparent, supportive institutional and regulatory framework to encourage market expansion. This can be done by rationalizing import duties and taxes, as well as incentive or subsidy programs, so as to put PV equipment on an equal footing with other means of supplying power. Governments should also ensure technical standards for PV components and systems; encourage a diversity of service providers, such as NGOs, the private sector, and local communities; participate in program implementation; provide monitoring and oversight services; and disseminate information on PV technologies as well as on the performance of solar home system initiatives.