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costs for remaining unelectrified areas exceeding $0.50/kWh because of small loads, off-grid supply may be theleast cost alternative.Off-Grid Renewable Energy: SolarPhotovoltaicsThis section focuses on SHS—historically the biggestrecipient of WBG support for off-grid renewable energyand still prominent in the portfolio (table 2.5). SHSsprovide individual rural households with modest levelsof power primarily for lighting and television. SHSs canr educe carbon emissions by substituting for kerosenelamps and grid-charged batteries. Because they promiseboth rural access and GHG reductions, they have attractedsubstantial funding.Since 1992, the WBG has contributed$790 million to SHS components.Barriers and interventionsThe barriers to SHS are well established:• Cost and financing for consumers: The cost of a 20-peakwatt (Wp) system ranged from $150 to $490 in the portfolio.Although the operating cost per lumen (unit of illumination)is theoretically less than that of a kerosene lamp,the up-front cost is prohibitive for most rural poor withoutfinancing. And rural finance poses its own problems.• Financing for manufacturers and dealers: SHS systemsare assembled by small manufacturers that find it difficultto get capital.• Biased pricing policies: In Sri Lanka, for instance, solarphotovoltaic modules were initially subject to 35 percentimport duties. In Indonesia, when the price ofphotovoltaic systems increased by 400 percent due tocurrency depreciation, the import price of keroseneand diesel only increased by 40 percent and 58 percent,respectively, thanks to government subsidies. InUganda, solar purchases were subject to extra dutiesaimed at protecting a local battery company.Photo by Dana Smillie, courtesy of the World Bank Photo Library.Since 1992, the WBG has contributed $790 million to SHScomponents in 33 Bank and 4 IFC projects in 34 countries.Virtually all had some degree of GEF support. The portfoliois concentrated in East Asia and the Pacific and Africa.The Middle East and North Africa is represented only bya $1 million project in Morocco, despite the region’s solarresource.This section draws on a review of the 12 World Bank projectsthat contain an off-grid solar photovoltaic component andwere closed or open and well documented, and that have aninstallation target greater than 10,000 SHSs (see table A.7).• Anticipation of grid connection: Households much preferthe convenience and reliability of grid connections andwill not invest large sums in SHS if connection to the gridis imminent. Ambiguous plans or too-optimistic promiseson grid integration can discourage demand for SHS.• Poor quality—actual or perceived: Uncertainty aboutSHS quality and reliability dampens consumer demandfor these expensive investments; uncertainty about consumerdemand dampens industry supply.Geographic barriers• : Off-grid populations tend to be inareas of low population density with difficult terrain.Renewable Energy | 27