Subsidies for technology adoption: Evidence from rural Cameroon

  • This research examines how a short-term subsidy for a new solar lamp affects uptake, usage, and future demand for the product in rural Cameroon.
  • The findings suggest that subsidies stimulate uptake of the solar lamps and do not adversely affect subsequent use of the lamps. If subsidies decrease future willingness-to-pay for lamps, this effect is outweighed by increased learning about the benefits of the solar lamps.
  • Lowering prices via subsidies also encourages uptake by households who don’t use the lamp very much.
  • Additionally, information about the benefits of solar lamps does not seem to spread far beyond the source households who purchased the lamp.
  • The findings can help policymakers better design subsidy programmes to encourage the uptake and use of clean energy products.