(introduction...)

1. The Asia Alternative Energy Unit (ASTAE) commissioned four case studies of solar PV program experience, in order to review the experience and performance of solar PV rural electrification in selected countries and provide guidance for future solar PV programs. Field investigations were conducted to: (a) determine the technical performance of installed residential PV systems; (b) examine the management systems and field performance of the organizations responsible for these installations and their capacity to implement expanded programs; (c) assess credit programs and revolving funds to finance solar PV purchases; and (d) evaluate the sociocultural benefits of the affected households and communities.

2. This Annex and Table 1 summarize these case study reports of Indonesia, Sri Lanka, the Philippines, and the Dominican Republic. PV programs in these countries ranged from government-sponsored programs, such as the BANPRES Project in Indonesia, to virtually no government involvement in promoting solar home systems, as in the Dominican Republic. Despite different implementation approaches, a number of common themes emerged. Each country has a large rural population without electricity service and a utility that lacks the financial and institutional resources to serve many of these rural communities. The solar PV programs have involved a rural organization such as a rural cooperative or grassroots NGO, government agencies or private firms. These organizations offered access to credit, supplied products and provided maintenance and support services. Credit shortages were listed as one of the major constraints to a broader use of PV in most of the programs. Affordability was limited as loans, when available, carried high interest rates and/or short repayment periods. While government-sponsored programs offered subsidized credit, funds were limited and cost recovery was poor. All of the programs incorporated training and maintenance support, but there were deficiencies. Typical PV module sizes of solar home systems ranged from 15-Wp to about 50-Wp and systems were mainly used to supply lighting and power for a radio or TV.

Table 1A. Summary Evaluation of Experiences in ASTAE Case Study Countries Institutional Evaluation

Criteria	Dominican Republic	Indonesia	Sri Lanka	Philippines
Organizational structure	ADESOL is an effective umbrella organization for manufacturers, technicians and entrepreneurs; good communication among solar home system organizations.	Key agencies including cooperatives, technology development, planning, energy, banking, etc.; participated in BANPRES project. Multiple agencies made communication difficult at times.	Solar home systems disseminated independently by private sector, NGOs and government agencies.	Bilateral program administered effectively; worked with local NGOs and Rural Electrification Cooperatives (RECs).
Market strategy	Solar PV market independent of rural electrification programs.	Site identification based on electric utility 5-year grid- extension plane. Longer range grid-extension plan not available at that time, but is currently available.	Customer selection was not formally coordinated with the electric utility. Private and NGO marketing used information from regional utility offices.	Strategy was to offer minimum power supply in unelectrified clusters, increasing the demand for electricity and area covered, until grid extension became viable economic alternative.
Information dissemination	ADESOL promotes PV technologies in rural areas; solar home system installers train consumers in load management/ maintenance.	PV technology promoted on the village level by cooperatives.	Private sector conducts own information dissemination programs. Government and NGO programs organized village demonstrations to educate potential users of PV technology.	Solar PV marketed as a "pre- electrification" option.
Sustainability of institutional structure	ADESOL is dependent on donor funds to seed the revolving funds. Private sector receives training from ADESOL.	Program dependent on government assistance for institutional support and to seed revolving fund.	Private sector depends on commercial sales. NGOs require seed funding their revolving funds. Gov't programs used public & bilateral funds.	Programs were dependent on bilateral financial and technical support, but administering agencies were existing institutions.

Indonesia

3. The Presidential Assistance Project (BANPRES), funded by a presidential grant through the Development Budget (DIP) was used to set up a revolving fund. BANPRES has resulted in the installation of more than 3,300 solar home systems since 1991. The goal of the project is to test the technical and social viability of photovoltaics for large-scale household electrification programs as a means of providing cost-effective electricity services to a portion of the approximately 20 million rural Indonesian households that are unlikely to receive grid electricity for at least ten years. As a result of the positive BANPRES Project experiences, commercially-oriented solar home system initiatives and other programs sponsored by the government have led to nearly 20,000 solar home systems installed to date. The government intended the BANPRES project to be a precursor to a one million household, 50-MWp solar PV program.

4. The Government of Indonesia places a high priority on electrification and is committed to supporting geographically balanced development of rural areas by increasing the welfare of the people and stimulating the growth of economic activities. The BANPRES Project, with project sites in 13 provinces, was designed to make effective use of existing rural structures and capabilities. The Project is led by the Agency for the Assessment and Application of Technology (BPPT). The BPPT is also responsible for all technical aspects including specifying and qualifying products, and field testing and monitoring. With the assistance of local governments, participating villages are selected based on their desire for electricity, location relative to the administrative area of a qualifying village cooperative (KUD), grid electrification plans, and capacity of householders to pay the down-payment and monthly installments. The KUDs administer the project at the village level. They are responsible for fee collection, maintenance services and enforcing disconnections for payment defaults. The Ministry of Cooperatives (MOC) interfaces between the government and the KUDs. Bank Rakyat Indonesia (BRI) is part of the institutional structure primarily because of its widespread presence in rural areas and fees collected by the KUDs are deposited at the BRI village branch. The implementation of the project is overseen by a Steering Committee. The committee is chaired by BPPT and is composed of key government agencies including the Directorate General for Electricity and Energy Development, PLN (public utility), Bank Indonesia, BRI, MOC and Ministry for Transmigration.

5. Once a village is selected as a project site, residents are chosen to receive BANPRES systems based on their ability to pay and whether or not they are active KUD members. Potential consumers must become full KUD members, if they are not already, and must be willing to sign a lease-purchase agreement with the implementing KUD. The agreement includes a Rp. 1,000 stamp duty. The KUD then contracts a private solar home system supplier to install the system that meets BPPT specifications. KUDs collect the down-payments and subsequent monthly payments. The KUDs retains Rp. 500 per month per solar home system to cover their costs and transfer the remainder to the BANPRES revolving fund account at BRI. Each KUD employs two maintenance and repair technicians. The user is responsible for battery replacement.

6. The solar home system consists of a 45- to 48-Wp PV panel, support structure, two fluorescent tube lights, switches, a 12-VDC outlet, wiring, an automotive battery, and a battery control unit. The system could generate 145 Wh/day with 6 hours of bright sunshine and is capable of providing 7-8 hours of lighting when operating both lights, or 5 hours of lighting and 5 hours of television. There are no major technical problems with the PV system or its major components or with users load management practices. BPPT assists local enterprises in designing and manufacturing all balance-of-system (BOS) components. Locally produced components are generally well designed and of adequate quality. Where deficiencies existed, BPPT works with the manufacturers to correct them. BPPT, MOC, and private enterprises did a thorough job of research and development, and project design throughout the pilot stage of solar PV project development. Warranty service is provided by equipment suppliers, and the suppliers are making an effort to abide by warranty terms and ensure that defective equipment is promptly replaced. Nevertheless, because the KUDs have not kept adequate spares, users have had to ask them to contact suppliers to send replacement parts, resulting in long lead times in the more remote areas.

7. Users pay a Rp. 50,000 down-payment, and Rp. 7,500 per month for 10 years for the PV system. The monthly fee for the solar home system was less than the PLN electricity service cost from a 450-W connection (about Rp. 4,000 per month for 30 kWh). The solar home system down payment and monthly fee does not allow for full cost recovery if the cost of money (about 18-20% per annum) is included in the monthly fee. Yet recipients often requested that the down payment be financed over several months. In contrast, other private sector solar home system sales targeted to more affluent households in rural Indonesia have down payment requirements of about Rp. 200,000 and monthly fees of about Rp. 20,000 per month.

8. In 1993, the fee collection rate in the BANPRES Project was about 60 percent. KUD officials attributed inadequate fee recovery to seasonal income patterns, short-term financial problems and families realizing they were unable to meet the solar home system financial obligations. In addition, the limited business management capability of some KUDs exacerbate the cost recovery problems. In many cases, the KUDs could not force users to comply with their agreements, since many KUDs did not always adhere to their contractual obligations. Despite strict penalties for late payments as specified in BANPRES guidelines, most KUDs have been handling disconnects for non-payment differently. KUD staff responsible for disconnecting service are often not given the authority to impose the necessary sanctions, particularly when it is the "power elite" who default. Once users learn that disconnects are not really going to be carried out, payment rates fall and the financial recovery worsens.

Table 1B. Summary Evaluation of Experiences in ASTAE Case Study Countries Financial Evaluation

Criteria	Dominican Republic	Indonesia	Sri Lanka	Philippines
Credit supply	Limited credit provided by NGO revolving funds; no commercial bank loans made; NGO loans offer below-market interest rates, will result in eventual depletion of funds.	Credit is supplied by the government-supported revolving fund; consumers pay a down payment and monthly installments for ten years at zero interest.	Very limited access to long-term credit. Bank credit offered at market rates, NGOs rely on revolving funds on-lent at concessional rates. Gov't programs require modest monthly payment.	Project established revolving fund to finance systems. Financing provided to RECs through National Electrification Administration.
Financial sustainability	Payments were generally good.	Full cost recovery was not an objective. Monthly payments comparable to basic utility services. Cooperatives had many inconsistencies in bookkeeping and collection practices. 60% average collection rate, despite low monthly installments.	High payment default rate for government programs until strict disconnect policy was enforced. Private sector and NGO programs had good cost recovery.	Full-cost recovery pricing strategy used except for initial seeding of revolving fund.
System pricing	Pricing could be reduced with greater competition.	Competition helped keep prices low.	High unit costs due to low volume sales and import tariffs. Unit costs were particularly high in gov't tied-aid program.	Program purchased solar home systems in bulk to lower prices.
Tax/subsidy structures	No duty on modules, 100% duty on deep-cycle batteries; import restrictions on solar PV components affected cost to customers.	No import tariff barriers. Fees exclude interest charges. Other organizational overhead costs absorbed by participating government agencies.	High import tariffs. Government program subsidized due to zero- interest financing.	Exempt from import taxes and VAT.

Table 1C. Summary Evaluation of Experiences in ASTAE Case Study Countries Technical Evaluation

Criteria	Dominican Republic	Indonesia	Sri Lanka	Philippines
System size selection	System sizes range from 25 to 48 Wp	Based on field tests. Mostly 45- to48-Wp systems.	Systems sizes included 18, 35, and 50 Wp	Used 53-Wp systems
System quality	Good performance No official standards set. Warranties honored by PV enterprises. Local auto batteries used.	Systems performed well. Warranty services offered by suppliers. System specification based on field tests. Local auto batteries performed well.	Private/NGO systems provided adequate service; No formal standards and specifications set. Local battery quality highly variable. Reliability problems plagued Gov't program.	Generally good when using imported components. Locally manufactured parts performed poorly.
Installation/ repair quality	Good installation and servicing skills.	Good installation procedures. Repairs usually involve part replacement rather than careful assessment of why the system failed.	Private sector/NGOs provided adequate installation and service. Gov't program lacked after sales service after first year, but improved after giving 5-year maintenance contract to private company.	REC technicians provided responsive and effective installation, repair and maintenance services.
Training/ maintenance	Enersol/ADESOL have effective program, which include training courses for technicians and entrepreneurs and monthly membership meetings.	No formal standards for maintaining systems. Had good consumer education program.	Private sector and NGOs had trained technicians and good consumer education programs. Poor communication led to user dissatisfaction with gov't program.	Effective training provided to NGOs. "Comic book" style user manuals proved effective.
Availability of spare parts	Available locally	Cooperatives did not stock many spare parts, led to long lead times for repair.	Spare parts not always available at local level.	Spare parts always available.
Battery recycling	No formal battery-recycling program.	No battery-recycling program was incorporated. But commercial battery recyclers operate in W. Java.	No formal recycling program. Current buy-back rates paid by battery recyclers too low.	Successful battery-recycling program was part of program.

Sri Lanka

9. Approaches used to disseminate solar home systems include sales through the private sector and NGOs, and government-sponsored programs (often with international donor financing). Three firms are active in the private sector: Solar Power & Light Company (SPLC), Sunpower Systems Ltd., and Vidya Silpa. Two NGOs have undertaken solar home system initiatives: SoLanka Associates, modeled after Enersol in the Dominican Republic; and Sarvodaya Jathika Sangamaya. Three government-sponsored programs have taken place in Sri Lanka, the first in 1983, and subsequently the Pansiyagama and the Mahiyangana projects. The latter two projects are administered by the National Housing Development Agency and executed by private firms. The Pansiyagama project is a 1,000-household solar PV project while the Mahiyangana project provides PV systems for health care and water supply applications. There have been about 4,500 solar home systems installed in Sri Lanka, a small fraction of the 2 million households, or 63% of Sri Lanka's population, that does not have access to grid electricity service.

10. The private sector sells PV systems directly to individual consumers, NGOs, local village cooperatives and government programs. SPLC is the sole domestic manufacturer of PV modules, importing the PV cells and fabricating them into finished panels. Other solar PV firms, NGOs and government programs purchase these modules at wholesale prices. All the solar PV suppliers offered warranties competitive with solar PV markets in other countries. Adequate spare parts were stocked by the company or local technician for system repairs. Battery replacement is the responsibility of the user.

11. The SPLC has a comprehensive after-sales service arrangement. The program consists of regionally-based trained technicians, scheduled household visits and reports, and brochures summarizing proper maintenance techniques and system use. SPLC devotes an unusually high percentage of its revenue to marketing, which involves provincial dealers, radio and TV advertisements, demonstration and training programs, and after-sales service. This program addresses issues overlooked by other distributors, but has problems with lead times for maintenance calls. SPLC is finding that providing these support services are difficult and costly due to limited sales.

12. The NGOs have adopted a more informal approach, relying on village-based technicians who work on commission. The NGOs offer maintenance and support services at the village level and promote the manufacturing of some components at the village level to supplement the income of their technical field staff. NGO projects are characterized by active local participation in project design, maintenance, and collection of loan payments. Such close ties with the local communities has allowed for good communication between program organizers and solar home system users.

13. The government-sponsored Pansiyagama solar PV project initially made no provisions for system maintenance. Later due to poor technical performance and fee recovery problems, a private firm was contracted for one year to make monthly service and fee-collection visits to each household. The firm conducted routine system performance tests and educates users on operation and maintenance. The Pansiyagama project also suffered from inadequate communication and coordination with the electric utilities, NGOs, local credit institutions and potential solar home system users. Based on the success of the one-year contract, a five-year system maintenance contract has been issued to provide continued maintenance and support services.

14. Typical solar home systems consist of a PV module (18-, 35-, or 50-Wp), support structure, wiring, a lead-acid automotive battery, a battery-control unit, a 12V outlet, and 3 to 6 fluorescent tube lights. The cost of a small 18-Wp system in Sri Lanka is Rs. 13,322-15,500. Overall, the systems were reliable, of reasonable quality, and provided adequate service. However, the poor quality of locally-made batteries has led to unreliable performance. Some of the systems at Pansiyagama used untested, poorly designed or defective components which contributed to a significant failure in initial installations.

15. Private sector sales are financed by cash, bank credit, or hire-purchase agreements. However due to limited access to affordable credit, 80% of sales have been cash sales. Bank credit at market interest rates (22%) with a 5-year loan period is available but few households have accessed these lines of credit due burdensome security guarantees and limited promotion by the banks. NGO programs rely on revolving funds with concessional rates and extended loan periods, but funds are limited. Such loans typically have 8-10 year payback periods, with 7-10% interest rates. Systems sold under the Pansiyagama PV project required no down payment, modest monthly installments, no interest charges and a 20-year payback period. The government program resulted in a high default rate due in part to poor technical performance leading to user dissatisfaction. The repayment problems were compounded by the perception that government loans need not be repaid.

16. Due to limited availability of credit, most of the households that obtained PV systems were the rural upper and middle classes. The more affluent households self-selected themselves by their ability to pay for the systems. NGOs and government programs were designed to reach the poorer classes by offering easier access to credit. Nevertheless, the lowest income households in these rural areas would not be able to purchase PV systems in the absence of large subsidies.

17. Monthly payments for the 3-light solar home systems are Rs. 320 when financed at a 22 percent interest rate. It is higher than the monthly payment for grid service (Rs. 245) or battery and kerosene use (Rs. 275). While the government has removed the subsidy on kerosene, making solar home systems more financially attractive, there are still major subsidies for grid electrification. The battery replacement cost of Rs. 2,000 may be difficult for rural households without some means for regular savings towards this purchase.

The Philippines

18. The Philippines has had 20 years of experience with PV technology, yet such applications are still perceived as a means of "pre-electrification" rather than a permanent rural energy solution. Solar home system dissemination has been dominated by two rural PV electrification programs implemented under a bilateral agreement between the Government of the Philippines and the German Government. Besides government programs which have disseminated about 500 systems to date, about 10 local private companies supply solar home systems, selling 100-150 units annually to help bring electricity to a few of the more than 6 million Filipino families not connected to the grid.

19. In 1982, the Philippine-German Solar Energy Project (PGSEP) installed a 13-kWp PV plant, which was later found to be uneconomical due to its high capital investment. The project began to focus on solar home systems and communal battery-charging stations. Demand grew more than PGSEP could accommodate, leading to the Special Energy Program (SEP), initiated in 1987. The strategy of SEP is to distribute small solar home systems in clustered sites, gradually increasing the demand for electricity and area covered, until grid extension becomes an economic alternative. The SEP has developed site-selection criteria, which include: rural areas not included in near-term electrification plans; an approved Rural Electrification Cooperative (REC) to ensure quality servicing and fee collection; selection of adjacent RECs to facilitate program monitoring and servicing; at least 20 users in clusters within one day's travel time; an assessment of the ability and willingness to pay the down payment and monthly fees; and a local NGO or Barangay Power Association (BAPA) that can assume responsibility for collections, maintenance, monitoring, and safe, unrestricted access with regard to weather and political environment.

20. The SEP procures solar home systems on behalf of the RECs in bulk (50 systems per procurement package) and receives bulk discounted prices. The cooperatives then sell the systems to the users who pay cash for the balance of systems (BOS), except for the battery control unit (BCU), and make monthly payments for the module and controller. This initial payment is considered a connection fee, similar to the fee charged for household grid service connection. Local technicians from the REC respond to system problems and are generally responsible for installation, trouble-shooting and maintenance. New batteries are acquired by users from the RECs in exchange for old ones, which are then recycled.

21. The BAPA staff are responsible for fee collection and system monitoring. The users are trained in routine operation and maintenance practices and in load management. Users receive a manual in a "comic book" style. Service response by the REC technicians was mostly within two days and favorably perceived by the users. Unlike the solar home systems, the communal PV power systems and battery-charging stations established under the SEP had limited success due to the unclear delegation of responsibilities.

22. A typical solar home system has a 53-Wp PV module, a lead-acid automotive battery, a BCU, switches, a DC/DC voltage converter, a junction box, and five lamps. Systems generate 130 to 206 watt-hours (win) per day, depending on the location and weather conditions. A solar home system supplied on the average about 140 Wh/day, enough energy to operate one fluorescent light for 3 hours, one compact fluorescent light for 4 hours, and one radio for 12 hours. All solar home system components except for the PV panels are manufactured locally. Project experience with these locally made components has been poor. The locally manufactured batteries, BCUs, and fluorescent lamps performed poorly. Most of the failures were due to improper use or poor quality components, i.e., problems of technology application rather than the technology itself. A 12-V lead-acid automotive battery is used in the system, which often leads to problems due to customer abuse. Due to poor quality of the locally made lights and junction boxes, they were later imported. On the positive side, locally available panel support frames, insulated cables and tumbler switches are reliable. As the solar systems are purchased in bulk, spare parts are always available. The SEP has a successful battery-recycling program.

23. The average price of a solar home system is approximately P 23,000 (US $900). The solar home system components are exempt from import duties and value added tax. The financing scheme of the SEP includes financing from the National Electrification Administration to the RECs who then finance solar home system sales to users. The SEP also established revolving funds for the RECs to finance additional solar home system installations. The ability and willingness of users to pay for PV electrification is a significant issue in the Philippines. At most 10 percent of the total households can pay cash for solar home systems and an additional 20 to 60 percent could procure them if suitable financing schemes were available (i.e., 20-30 percent down payment and an amortization period of at least three years for the balance of the amount). The remaining households could not afford a solar home system, but could acquire batteries to be recharged at battery-charging stations.

The Dominican Republic

24. About 400,000 rural households in the Dominican Republic lack access to grid electricity. Solar home systems were recognized as an alternative to supplying rural electricity, without the need for government agencies' involvement as they were unable to meet the growing demand for electricity. Thirteen small businesses, members of an NGO, ADESOL, are currently active in solar home system sales. By 1993, these groups had sold over 2,000 solar PV systems. ADESOL promotes solar home systems and other PV applications, finances solar home system sales through a revolving credit fund, and provides technical and management training to small solar businesses and their technicians.

25. The institutional framework of the solar PV program in the Dominican Republic consists of ADESOL, local NGOs which manage credit programs for solar PV purchases, and the entrepreneurs who sell the systems. ADESOL began in 1984 as a credit fund, part of a grassroots effort by a US-based NGO, Enersol Associates. Its charter is to offer solar home systems services to households in unelectrified villages. Enersol, which had previously collaborated with Catholic Relief Service (CRS) and the US Peace Corps on solar PV projects, supported a project in the town of Bella Vista, Sosnersol efforts led to the formation of ADESOL, and a small PV equipment supply business, which is now Industrias Elricas Bella Vista (IEBV). Enersol also promoted the concept of a local credit fund and solar home system supply business to others interested in PV. These efforts led to a solar PV project within the Development Association of San Jose de Ocoa (ADESJO). ADESOL and Enersol were effective in training small entrepreneurs and their technicians. The ongoing association between ADESOL and Enersol for technical assistance is strengthened by Enersol's ability to tap into grants targeted to US organizations.

26. The businesses in the ADESOL network employ 32 people and their resources vary considerably. Some operate in towns, with access to transportation and communication, while others are based in the villages in which they install the systems. IEBV imports all of its panels and purchases the remaining system components locally. Many of the smaller businesses purchase their panels from IEBV, although one company, Solar Luz Cibao, imports some of its own panels.

27. ADESOL board members, consisting of technicians and entrepreneurs, and its general membership, consisting of solar home system technicians, hold a one-day meeting each month to strengthen the solar technician network and perform follow-up training. ADESOL has only two permanent employees. They work with a group of about 10 Dominican and international trainers who conduct the training courses. Trainees who become active in the solar PV business join ADESOL and become part of its technician network. The fact that ADESOL has trained some 40 technicians since 1986 has been instrumental in disseminating PV technology within the country.

28. Currently, four NGOs are providing credit for solar PV purchases: ADESOL, ADEPE, SSID, and ADESJO. ADEPE, which began offering credit for solar home systems in 1991, combines an extensive rural promoter network with a well-established financial capability. SSID, a church-based community service organization, began financing solar home systems in 1992. ADESJO began making loans for solar home systems in 1985. These NGOs receive the initial funding from donor organizations, including Enersol, Peace Corps Partnership, UN 1% Fund, W. Alton Jones Foundation, the Dutch Embassy, and CRS. The NGOs then provide loans directly to consumers to purchase systems from local entrepreneurs.

29. In the Dominican Republic, NGOs with strong financial support tend to have an urban bias, while the most effective rural developers often lack the financial backing. Only ADEPE has the necessary financing and human resources to handle an expanded program. Businesses involved in the solar PV market face obstacles to expanding their operations, largely due to a lack of training, limited contacts that the rest of the educated business community enjoys, inadequate working capital, limited resources for promotion and advertising, and a lack of physical resources, such as vehicles, communication, warehouses, and workshops. The small businesses generally have not competed with each other for business because their regional markets do not overlap. This is changing in at least one region, where the ADEPE community now has two small entrepreneurs in the ADESOL network.

30. The PV module size of a typical solar home system ranges from 25 to 48 Wp. A solar home system consists of a PV module, one lead-acid automotive battery, a battery charge indicator/load center with a PV module disconnect switch, a fuse and light fixtures. A typical system powers one fluorescent lamp, four 15-W incandescent bulbs, a 14-W black-and-white television, and a small radio/cassette player. The average installed price of a 48-Wp system is about US $700. Many of the systems and installations were adequate for medium-term usage, although some systems did experience technical problems. These problems dealt with improper support structures for modules, missing battery boxes and voltage regulators, overloaded wiring, and owner misuse (bypassing the battery controller to direct-connect appliances to the battery). The PV modules were reliable except for those using thin-film silicon modules. The manufacturers honored warranties in all cases of failure. Users were generally well-informed about load management and technicians were trained in both installation and troubleshooting.

31. The systems are purchased and owned by the user. Monthly installments are about US$30, compared to about US$36 in households using kerosene and batteries. Prices of solar home systems have increased substantially in local terms, largely due to the devaluation of the peso. Customs charges, exchange-rate surcharges, and domestic industrial protection have also adversely affected the solar PV business. SOLUZ, a US firm, has recently been collaborating with IEBV to lease solar home systems, making the systems available to a larger percentage of the rural population. Since 1994, these efforts have resulted in over 100 systems being leased, with service fees sufficient to allow full cost recovery and be commercially profitable.

32. Access to credit is still a major constraint for solar home system sales. This lack of credit, coupled with solar home system promoters targeting the relatively affluent households, result in about 80% of the sales by cash. Commercial banks do not usually offer credit for solar home systems, which they view as consumer durable goods. NGOs offer loans through a revolving credit fund, which typically require a 25% down payment, 18% interest rate, and a 1-2 year payback period. The revolving credit funds are proving effective, but limited, largely due to the dependency on donations for initial funds.

Conclusions

33. These case studies document several models for implementing solar PV programs. The findings of the ASTAE evaluations are summarized in Table 1. In addition, the solar PV program in Mexico is a good example of a large-scale PV electrification effort that is part of an integrated rural development project implemented by the government. Several papers documenting the Mexican experiences are noted in the "References" section of this report. Although there is no preferred approach to solar PV promotion, local conditions and cultures might make one method more appropriate than another. The individual case study reports contain detailed descriptions of solar PV programs along with country-specific recommendations. These reports can be obtained from ASTAE at the World Bank by writing to: Asia Alternative Energy Unit (ASTAE), The World Bank, 1818 H Street NW, Washington DC 20433, USA.