A Study on Consumer Preferences to Adopt Domestic Biogas Digester Technology in Rwanda

Abstract

Approximately 99.4% of households in Rwanda rely on traditional biomass energy for cooking in rural areas, particularly firewood, charcoal, and agricultural waste regardless of the negative implications on health, the environment, and the economy. To address these energy challenges, the government initiated multiple renewable programs to provide alternative clean and modern energy services for cooking. Biogas energy technology is a contender as a viable and affordable energy technology service that can meet rural energy demand for cooking because of its multiple benefits for health, the environment, and the economy, including the provision of a supply of slurry for agricultural production. Despite government efforts to underpin a biogas program by providing a flat subsidy of approximately 300,000RFW for the partial installation of a biogas digester to consumers, the penetration rate has remained extremely low at 1% since 2007. This raises the question whether the current biogas policies stimulate the adoption of biogas digester technology by consumers. To answer this question, the study investigated consumers willingness to pay (WTP) for domestic biogas digester technology as a substitute for traditional biomass energy in rural areas using conjoint analysis and discrete choice models. The study conducted a conjoint survey on 250 rural households with 4,500 observations, and each household had at least three cows. The sample was selected from five districts with substantial cattle because cow dung is the main feedstock for biogas production. The study used a rank-ordered logit model to estimate consumer WTP for domestic biogas digester technology. The study used five attributes to develop 18 choice sets including the size of the biogas digester, cost, guarantee period, the service provider, and time saved after the application of the biogas digester. The key findings show that household preference to adopt biogas digester technology increases with a sizeable biogas digester, with a low cost for the biogas digester, with an increase in household income, with a substantial guarantee period, and when the service provider is a private supplier. This study suggests that the government enhance awareness campaigns on the benefits of biogas digester technology. The study recommends the biogas financial subsidy reform to set up flexible funding policy based on consumer preference structure for biogas plant size, biogas standards, and a quality insurance framework with regular monitoring systems to formulate strong incentives such as tax subsidies, access to soft loans, and legal and regulatory frameworks that will motivate the private sector to invest in the biogas industry.