A Choice Experiment Study of Household Investor Preferences for Renewable Energy Investments in Sub-Saharan Africa
: A Case Study of Ghana

  • Bridget Okyerebea Menyeh

    Student thesis: Doctoral ThesisDoctor of Philosophy


    Inadequate access to electricity remains one of the pressing challenges in Sub-Saharan Africa. Ensuring universal access by 2030 will require additional sources of finance as current investment volumes are inadequate. Increasingly, the integral role that household investors can play is being realised and understanding the preferences of such household investors is crucial to raising the necessary investments to bridge the gap.

    Using a discrete choice survey administered to Ghanaian households considered at least middle class in terms of income, this thesis sought to investigate household investor willingness to pay for the attributes associated with renewable energy investments and assess if and where preference heterogeneity exists for the attributes. A second study on financial literacy was also undertaken to gauge household investor understanding of basic financial literacy concepts considering that crowdfunding for renewable energy requires investors to make their own financial investment decisions often without expert advice.

    The findings show that the track record of the developer is the most valued attribute associated with the highest marginal willingness to pay for RE projects. This was followed by the project viability attribute that represents the availability of support systems deemed necessary to enhance the viability of RE projects. Interestingly, the rate of return, although valued, was not the most important in the decision-making to invest. Additionally, the findings establish the presence of heterogeneity between respondents for investment attributes. On demographics, young people (18 to 34 years) were found more likely than other counterparts to invest in renewable energy. Also, an investigation of the choice of technology showed that solar PV was the most preferred technology while wind energy is the least preferred.

    Regarding the financial literacy study, the findings show that financial literacy is not lacking among the middle-class. Among the three concepts tested, it was found that risk diversification is the least understood concept, while compound interest was the easiest to score. Secondly, a gender gap in financial literacy is not found as heavily documented in the financial literacy literature.

    Overall, this thesis highlights the importance of non-financial factors in the renewable energy investment decision making of household investors aside the rate of return. It also contributes to the scanty literature on financial literacy among the middle class, especially in a developing country context.
    Date of Award2020
    Original languageEnglish
    SupervisorAriel Bergmann (Supervisor) & Stephen Dow (Supervisor)


    • Discrete Choice Experiment
    • Renewable Energy Investment
    • Financial Literacy
    • Household Investors
    • Middle Class
    • Willingness to Pay
    • Crowdfunding

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