Market Failures and Off-Grid Solar Electrification in Uganda Evidence from the Electricity Access Scale-up Project and the Digital MRV Tool Prospect

Sammanfattning

Access to electricity remains a major development challenge in Uganda, where a large share of the population is still unelectrified. Off-grid solutions and policy interventions have been viewed as possible strategies to combat this issue. This thesis therefore examines market failure and information asymmetry in Uganda’s off-grid solar market, with a particular focus on the Electricity Access Scale-up Project (EASP) and the digital Monitoring, Reporting and Verification (MRV) tool Prospect. The study aims to identify the main challenges and market failures within the Ugandan off-grid solar sector, assess the contribution of EASP to increased electrification, and analyze how Prospect affects transparency and information asymmetry between market actors. A mixed-methods approach is applied, combining qualitative interviews with key stakeholders in Uganda’s energy sector with descriptive trend analysis and panel regression models based on sales data from off-grid solar companies between 2020 and 2025. The findings suggest that the Ugandan off-grid solar market is characterized by affordability barriers, weak institutional capacity and limited access to reliable data. The qualitative and descriptive quantitative results indicate increased off-grid solar sales following the implementation of EASP, although the regression results with clustered standard errors proved to be insignificant. Furthermore, the results suggest that the digital tool Prospect has improved transparency and data accessibility among some actors in the market, with smaller firms appearing to face greater challenges in adapting to the system.