Cost-Effectiveness Evaluation of Off-Grid Community Systems in Tanzania Using Randomized Field Trials

Off-grid community systems are critical for sustainable rural development in Tanzania, where access to electricity is limited. However, their cost-effectiveness remains uncertain. A randomized controlled trial design was employed with a sample size of 50 communities randomly divided into an intervention group (receiving off-grid solar systems) and a control group (no system). Data on electricity usage, crop yields, and financial costs were collected over two years to assess the impact. The randomized field trial revealed that the average cost-effectiveness ratio of the off-grid solar systems was $2.50 per unit of economic output, indicating a significant return on investment for communities in Tanzania. This study provides empirical evidence supporting the implementation of off-grid community solar systems as an affordable and effective solution to rural energy needs in Tanzania. Policy makers should consider subsidizing or mandating off-grid solar systems to enhance agricultural productivity and reduce poverty among rural communities in Tanzania. Model estimation used $\hat{\theta}=argmin_{\theta}\sum_i\ell(y_i,f_\theta(x_i))+\lambda\lVert\theta\rVert_2^2$, with performance evaluated using out-of-sample error.