Tariffs for Off-Grid Renewable Energy

EMRC developed a conceptual framework and decision-making tool for designing user charges for off-grid energy solutions and determining appropriate subsidization/incentive in Tanzania. These outputs will be based on:

  • - Analysing cost of service, anticipated revenue profiles, and viability gaps for selected mini-grid sites in Tanzania;
  • - Reviewing the evolving context for off-grid tariff setting and developing options for off-grid tariff application, design and determination; and
  • - Evaluating metrics to be used as the basis for user charges, designing an appropriate framework (including in a PPP context), and developing a tool to support tariff determination;
  • - Testing the framework and decision-making tool for selected potential mini-grid sites and SHS operations in Tanzania, including options for tariff design, evaluation of potential options, and outcomes of each option for key stakeholders (DESCOs, consumers, public sector);
  • - Engaging with regulators and other relevant stakeholders in Tanzania and other selected countries (along with the IFC team) to review and validate the framework;
  • - Identifying implications for regulation and for tariff determination processes in Tanzania;
  • - Exploring applicability of the framework in 2-3 other SSA countries and identifying potential modifications to the framework for other country contexts.

It is designed to support policy makers and regulators in creating a level playing field for services supplied by off-grid solutions vs. the central grid, thereby supporting the broader objective of scaling up energy access in Tanzania.