PicoPV Policy: Issues and Options
Policy options to promote a dynamic development of the PicoPV market should entail the full range of typical instruments of ODA in the energy sector, all geared towards two objectives:
- speed up the market penetration lest large (low income) market segments remain excluded for an undesirable interim period due to market inefficiencies or rationale private sector pricing strategies (cream skimming) and/or
- protect consumers from “lemons” so as to avoid welfare losses – i.e. prevent that markets are flooded with low quality short lifetime products due to information asymmetries to the disadvantage of consumers (which would be especially devastating to the poorest users targeted by some of the PicoPV lamps).[1]
Regulatory measures
The main task of regulatory measures would be to protect customers (and markets) from the effects of market inefficiencies.
This relates mainly to information asymmetries, but also to inefficient taxes and customs.
Typical tasks would be to:
- Inform all national stakeholders about global product quality and key quality issues
- Define national specs
- Develop a quality Label (regulation by information). This is an important aspect, because a lot of products still fail to achieve quality standards, expected from a mass produced system [2].
- Develop local testing abilities.
- Delegate “PV regulation” to decentralized entities
- Align import duties on different solar equipment[1]
Subsidies
Clearly, the most controversial discussion will be whether to subsidize PicoPV products or not.
Facts of subsidies in general are already discussed for several products. Further information about subsidies of Solar Home Systems, which can be applied for PicoPV systems as well, and examples of different countries can be read up here.
One example of subsidies applied for PicoPV systems can be read up under: Subsidies for solar lanterns in Bangladesh
