Mini-Grid Tariff Reduction Innovation Insight: Reducing tariff leads to large and sustained increases in demand on mini-grids

22 September 2022
Innovation Lab Tariff Reduction Prototype

CrossBoundary’s Innovation Lab recently completed an analysis of the Tariff Reduction prototype, which the Lab ran from 2018 to 2022 in Tanzania. The findings prove that mini-grids can deliver lower tariffs to rural customers with significantly fewer subsidies than the main grid.  

Why? Lower tariffs significantly increase consumption, and these high consumption levels are sustained over time. 

Download the full Innovation Insight to learn more about the impact of reducing tariffs on mini-grid consumption patterns. 

Average consumption per user (ACPU) index across treatment and control sites

Average consumption per user (ACPU) index across treatment and control sites

We are seeing that mini-grids customers have maintained ~1.5-3x their baseline consumption 3+ years after tariff reduction. This is good news for developers and donors: it means tariff reduction programs can sustainably be launched at scale; since customers will maintain the high consumption levels required to justify such programs. 

Read the latest Innovation Insight from CrossBoundary’s Innovation Lab.

CrossBoundary’s Mini-Grid Innovation Lab, part of CrossBoundary Group, is Africa’s first R&D fund exclusively focused on testing new business model innovations for mini-grids, designed to close the gap on the 618 million Africans who do not have power. The Mini-Grid Innovation Lab works with developers across the continent to test innovations to make mini-grids a more reliable and commercially viable solution.

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