Grid extension typically has a high capital cost.
Grid extension varies in cost depending on:
- the utility
- the terrain
- the distance to be covered
- the size of the load to be served (in most cases, the cost varies only slightly with the size of the load to be served which makes it uneconomical for small loads but a better option for large loads)
Reliable local grid: If the local grid is fairly reliable and within a few miles, obtaining an estimate for the capital cost of grid extension and the recurring cost of electricity will give points of comparison when considering other options.
Unreliable local grid: However, if grid electricity is less than reliable, then some form of backup energy will be required even with a grid extension.
The connection costs of individual customers to the grid consists of the following costs:
- electric meter
- installation costs.
- In addition to that the customers have to finance the inhouse wiring.
Below are the current connection costs from different countries. Please feel free to add information.
- electric meter: around 200 Bs = 22 €
- installation costs: 400-600 Bs = 44 - 66 €
- total connection costs: 70-90 €
The in-house wiring costs additional 160 Bs = 20 €. The big utilities do not charge for the electric meter but for the installation costs.
-> Bolivia Energy Situation
The average connection cost for customers living near the grid (usually less than 150 feet) ranges from US$50 to US$100 per household.
-> Ethiopia Energy Situation
Loan Schemes to Make Connection Costs Affordable
One way to make the connection to the grid more affordable is to provide people with the necessary microcredit to pay for the cost of connection. When utilities grant concessional loans to customers the pace of connection generally increases. Utilities normaly use two to five-year loans, either with low interests or interest-free. Unfortunately, the concession of those loans consume considerable amounts of working capital, which needed to be backboned by other sources.
- ↑ USAID - http://www.poweringhealth.org/index.php/topics/technology/grid-extension
- ↑ 2.0 2.1 2.2 Experience from EnDev - https://energypedia.info/wiki/Energising_Development_%28EnDev%29