Performance evaluation of solar mini-grids in Bangladesh: A two-stage Data Envelopment Analysis

• Published in: Cleaner environmental systems 2021-06, Vol.2, p.100003, Article 100003
• Main Authors: Aziz, Shakila, Chowdhury, Shahriar Ahmed
• Format: Article
• Language: English
• Subjects: Bangladesh; Data envelopment analysis; Electricity access; Off-grid electrification; Solar mini-grids; Tobit regression
• ISSN: 2666-7894; 2666-7894
• DOI: 10.1016/j.cesys.2020.100003

Solar mini-grids are the solution of choice for the electrification of remote off grid communities across the world. However, studies of comparative performance evaluation of such mini-grids are limited. In this article, we propose performance parameters for off grid distributed electricity generation systems like solar mini-grids, and on this basis evaluate the performance of 21 solar mini-grids which have been in operational in Bangladesh for at least a year, using a two stage Data Envelopment Analysis approach. We look at the efficiencies in terms of project costs, land cost, storage capacity, number of customers served, consumption per customer, rated capacity, power generation, distribution network and annual power consumption. Our findings indicate that all the mini-grids are installed in a relatively cost effective way. However, the market potential in the mini-grid sites is often underestimated or overestimated, leading to inefficiencies. The sensitivity analysis of the models has also been conducted. The effects of uncontrollable factors like solar irradiation, panel efficiency, panel costs, land costs, solar home system penetration and share of commercial users are tested using Tobit models. All these factors except competition from solar home systems affect the efficiencies of the mini-grids. This study is the first to provide a benchmark based comparative analysis of off-grid solar mini-grids, proposing financial and technical performance parameters specifically applicable to the off-grid context. [Display omitted] •DEA and Tobit analyses are used to evaluate 21 solar mini-grids in Bangladesh.•Suitable criteria for evaluating off-grid solar mini-grids are defined.•Most mini-grids have cost effective installations.•Many mini-grids have generation capacities in excess of local needs.•The share of commercial users affects mini-grid electricity demand.