Where _E(Y1 | D=1) and E(Y0|D=1)_ are, separately, the average kerosene use among households that purchased SHS and those who have a similar probability of purchasing SHS based on observed covariates ( _Xhv, Vv, L_ ), but have not installed SHS.

# 5.1.2 Kerosene displacement

Table 3 presents the estimated kerosene displacement using both regression and PSM methods. The displacement impact is statistically significant, indicating both SHSs and grid-electricity access reducing kerosene use. The impact of SHS access has a much larger impact on displacing kerosene than grid-electricity access. Focusing on the results from SHS, on average, the estimated kerosene displacement is about 2.7 liters/month by OLS (compared with 1.4 from gridelectricity connection) and 2.5 liter/month by PSM (1.5 from grid connection), after controlling for household socioeconomic factors, village electrification status and location effects. The scale of kerosene displacement increases with household incomes: about 2.3 liters per month being displaced for the bottom two income groups while for the top two groups displacement amount is about 3 liters.

The estimated displacement effect using the two methods is broadly consistent, although estimates from the PSM are slightly larger than that obtained from OLS. The standard errors associated with the estimates using the PSM method are substantially larger for the bottom and top two income groups than that using the OLS regression.

# 5.1.3 Avoided carbon emissions

The estimated kerosene displacement forms the base for quantifying the carbon emissions avoided from SHS dissemination. Using the carbon emission factor for kerosene (2.45 kg CO2/liter), the avoided CO2 emissions for the most commonly purchased SHS (40-50 Wp) is about 76 kg CO2 per year in the context of rural Bangladesh. The study by Posorski et al (2002), using different method, shows that about 9 tons of CO2 equivalent GHG emissions are avoided (which is equivalent to about 450 kg CO2 per year) within a 20-year period of use of one SHS of 50 Wp compared with the baseline case.

The reported CO2 emissions avoided from SHS from other countries, including the Bangladesh study, are summarized in Table 4. The estimate from the Bangladesh survey is significantly smaller than that reported in other studies (Ybema et al, 2000)<sup>6</sup> , possibly due to two factors. First, the estimates from this study is based on a large scale household survey that allows the control for household socio-economic characteristics and location effects while other studies do not control confounding factors that may affect the kerosene use. Second, the Bangladesh study focuses only on kerosene displacement due to data limitation, but some studies reported in the table include multiple fuels (kerosene, dry cell batteries, and diesel used for battery charging).

While displacing kerosene use for lighting and diesel use for battery charging are the most direct carbon benefit, SHS dissemination can also avoid GHG emissions from new connection to grid-

> 6 The estimated reduction is 3.9 liter/month from a smaller scale household survey (441 households) conducted by Grameen Shakti in 2009.  Chaurey and Kandpal (2009) provide an estimate of 9.6 liter/month for rural households in India and the World Bank project report finds 19.6 liter/month displacement for rural households in Indonesia.

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