Hello! I’m a student at UC Berkeley who’s new to Effective Altruism and am working with Dr. Robert Van Buskirk and my fellow Berkeley student Alex Wang on an EA solar project this year. This post is designed to broadly cover what the project is, why we view it as important to the EA community, and the procedures we will use to determine the cost-effectiveness of this project. Comments and feedback are welcome and would be appreciated!
Description of Project
Solar4Africa’s Project 5 (“Forever Lights”) has to do with long-lasting lights and off-grid DC electricity powered by lithium-titanite alloy solar batteries. Lithium-titanate batteries have a cycle life that is ten times longer than lithium-ion batteries, so they can provide more benefits over the long-term compared to typical solar systems that are sold in rural African markets. The plan is to produce many of these lights, create a subsidy for the lights and batteries via donations, and then distribute them to families in rural Malawi. From there the hope is that these long-lasting solar lights and batteries will generate consumption income for 5 to 20 years for these families in the form of reduced spending on other forms of power, possible health benefits, etc. This project aims to use the cost-benefit modelling procedure described in this post to determine an appropriate subsidy for these lights and batteries, and whether the project itself is cost-effective under the standards advertised by GiveWell and OpenPhilanthropy (more details in the later sections).
References to previous work
A substantial amount of research has been conducted regarding the energy shortages in Africa. For instance, in “Energy Access in Sub-Saharan Africa: Open Philanthropy Cause Exploration Prize Submission” by Tomer Goloboy, the author addresses energy access in sub-Saharan Africa, where millions lack electricity. It highlights global moves away from fossil fuels, posing challenges for Africa's short-term growth versus long-term carbon mitigation. The writer advocates nuanced, localized solutions over broad approaches and highlights the underrepresentation of African countries in climate finance. As a result, he proposed interventions include Clean Air Task Force's Energy Access program and Small Modular Reactors for cost-effective energy, emphasizing exploring these options' potential leverage while urging caution and scrutiny concerning potential risks and benefits associated with rapid growth and improved energy access in the region.
While the significance of the prior article underscores the critical need for sustainable energy solutions in sub-Saharan Africa. Our forthcoming research will focus on exploring the enduring advantages of sustainable very-long-lasting solar batteries in the region, emphasizing long-term cost savings. Using both qualitative and quantitative research methods, including a tailored subsidy model, we will analyze the potential long-term benefits and determine the most cost-efficient subsidy level. This comprehensive approach aims to provide valuable insights into the feasibility and advantages of integrating solar batteries for sustainable energy access in Malawi.
Longterm Aversion - Why the Subsidy Model is necessary
Despite the empirical evidence underscoring the numerous benefits of investing in long-lasting solar batteries, a prevalent reluctance exists among consumers to embrace this transformative technology. Research, such as Jaradat and Boussabaine study on time preferences and consumer willingness to pay for green electricity, elucidates that individuals often prioritize short-term gains over the long-term advantages associated with sustainable energy solutions. Furthermore, the concept of asymmetric bias, as highlighted in the IEA's "Value of Time in Energy Decisions'' study, is another significant factor influencing decision-making. This bias results in a myopic focus on immediate gains, eclipsing the broader, more substantial advantages that renewable technologies offer, thereby impeding their widespread adoption. In a world where immediate gratification often takes precedence, the lack of awareness regarding the long-term benefits of solar batteries and the impact of asymmetric bias greatly affect their acceptance and hinder their broader integration into our energy systems.
Subsidy model and importance
Due to the factors described above, we would like to subsidize the batteries to make them cheaper and therefore more economically incentivized for the recipients. Deciding how much of the upfront price will be subsidized is one of the central purposes of this project; if the subsidy is too high, the project might not be as cost-effective of a use of donations than something else, whereas if the subsidy is too low, recipients might not purchase the solar lights. For this project we will be using two main standards: Open Philanthropy’s standard of an $1 donation producing 4 people-percent-years of benefit for recipients, and/or a health-impact-denominated cost-effectiveness of GiveWell of roughly $125 per DALY averted. After calculating the net benefit produced by these lights to recipients, we will convert to find the maximum allowable subsidy that donors can pay for so that the project remains cost-effective by this metric. To put some example numbers on this, if we find that each unit costs $10 to manufacture and produces 30 people-percent-years of benefit, the maximum allowable subsidy would be $7.50, or 75% of the price of the lights.
Cost-benefit modeling procedure
Dr. Robert van Buskirk has already created a preliminary post addressing this aspect of the project including many of the technical details. To summarize some of the key points of this post, we are planning on detailing all possible ways in which both solar lights and 12V solar batteries could improve quality of life for the recipients, primarily focusing on economic and health benefits. Each of these aspects will then be modeled using a Monte Carlo method to determine low, median, and high estimates for the net benefit produced by these lights for the recipient, especially as compared with sourcing electricity from standard, less long-lasting lead-acid or lithium-ion batteries. As previously mentioned, we will then standardize the units into allowable USD cost to donors to determine the maximum allowable subsidy. We will then use these final calculations to make a decision as to whether this project is worth funding and executing.
One notable statistic that we are using is that lithium-titanate batteries have a projected life of around 10 years (tentative interval: 4-15 years, might be updated upon further research), compared to “normal” lithium-ion batteries which don’t typically last longer than two years. This differential of battery lifespan can be used as the expected duration for which recipients can enjoy the benefits of their solar lights.
We’re very open to genuine comments and valuable suggestions you might generously offer, thanks! We will begin work on cost-benefit analysis shortly and create a follow-up post with our findings within a month or so.