Residential access to modern energy and lighting is important for development in that it improves living standards and productivity (World Bank, 2006). However, developing countries often face severe constraints on available electricity, which result in blackouts. In the developing world, where lighting is a major component of residential electricity consumption, energy efficient technologies, such as compact fluorescent lamps (CFLs), can reduce overall household electricity demand while permitting utilities to simultaneously reach a greater number of customers with existing supplies. Still, when CFLs have been introduced in developing countries through mass replacement programs at a zero or subsidized price, their use is often discontinued once the consumer is required to pay the full price. This represents a major constraint to realizing the potential impacts of energy efficient lighting.

This paper presents results from randomized experiments designed to inspect several mechanisms potentially impacting the adoption, continued use, and diffusion process of energy efficient technologies, including: (1) the differential impacts on electricity savings of energy efficient technologies received for free or for a positive price, and (2) the role of information spillovers in spreading information on the energy efficient technology. As initial take up of CFLs may be limited because the willingness to pay (WTP) for them is lower than the market price, WTP was elicited experimentally to study these two mechanisms.

According to preliminary analysis, households that received free light bulbs have significantly lower average electricity use post-intervention than control groups; however, no significant impact on electricity use is found amongst households that purchased the CFLs for a positive price. These results contribute to research on the role of pricing, free distribution, and cost-sharing in the adoption of new technologies (Kremer and Holla, 2008; Cohen and Dupas, 2010; Dupas, 2012).