New Study Suggests Green Energy Will Not Solve Global Poverty

Environmental advocates have long pushed for the transition from fossil fuels to renewable energy—particularly solar and wind.

They claim that doing so will not only benefit the environment and prevent climate change (it won’t), but that locally-generated, renewable energy could help lift the developing world out of poverty.

But a recent study turns that logic on its head.

The study looked at the impact of solar energy on rural India. The researchers wanted to know if providing solar panels to poor families, currently without power, could lift them out of poverty.

Factors considered included money savings on fuel, the benefit of additional illuminated working hours, and other general socioeconomic information.

To test this, the researchers partnered up with a solar panel provider, and installed solar panels in 600 households—the other 600 in the study received no such benefits.

The researchers, and most experts, hypothesized that access to electricity would benefit low-income rural Indians. Why? Because access to free electricity would save them money on buying kerosene for their lamps, which can be expensive, and bad for their health.

Furthermore, they assumed that these cost savings, combined with better illumination into the night, would make people more productive—they would have longer working days, and could spend more time learning new skills.

But what they found was disheartening. The study states:

…there were no consistent effects on savings, household expenditures, household business creation, time spent in productive work by women, use of lighting for study, or other indicators of socioeconomic development, including female empowerment.

In short, free electricity did nothing.

The paper suggests that this may be because the solar panels did not provide enough energy to undertake any large scale projects. Furthermore, the study says that the variability of solar energy may have hampered its usefulness.

Here’s my take on it: local solar panels could marginally improve the quality of life for India’s rural poor. How? They could provide enough electricity to charge small appliances, like shavers or blenders—little things.

But they are not the panacea that environmentalists thought they were. Why not?

Like the study says, solar power is simply too volatile to be useful on a large scale. Think about it: if you were in their position, would you open up a store that sells refrigerated products if your refrigerator only worked 70% of the time? No.

The same goes for a myriad of other activities. You want to build something? Good luck charging your power tools. You want to work on your computer? You can pick between that and boiling your water.

No. The money would be better spent simply expanding the power grid.

But it’s more than that.

We in the West always assume that everyone would behave exactly like us, if only they had our technology, our education, our wealth etc. But this is not the case. Different people have different cultures, different values, and different attitudes towards work.

While the researchers were remissed to find that these people did not use additional hours of illumination to work, or learn new trades, this is not at all surprising.

These people are farmers, and have been for thousands of years—they are not all computer-scientists in disguise. Most do not want to be computer scientists.

If you want to help them, invest in a railroad to help them get their products to market. Help them get credit to buy a tractor, or better seeds—like what Muhammad Yunus suggests in his book Building Social Business. That actually works. Giving them high-tech gizmos does not.

This is no different than suggesting that agricultural skyscrapers will somehow solve world hunger—it’s time we realized that throwing money at a problem is not always the best way to solve it.

Sometimes the solution is as simple as enforcing the rule of law, or burning more coal.