Subsidies for Biogas Adoption : Experimental Evidence from Cameroon

Subsidies are considered to be an effective tool for promoting the adoption of new technologies. Many studies have looked at the impact of subsidies on the adoption of simpler, moreintuitive, and more affordable technologies requiring limited co-investments from prospective adopters. We study the impact of subsidies on the adoption decision of a more complex and less affordable energy technology: biodigesters for the production of biogas in rural Cameroon.We conduct a clustered Randomized Control Trial where we randomly assign subsidy levels for the construction of a biodigester to village clusters. We find that 25% and 45% subsidy levels successfully incentivize initial stages of technology adoption by increasing contract signing by 17% and 24%, respectively, but have no effect on the eventual construction of biodigesters. We identify household characteristics associated with higher likelihood of constructing a biodigester and highlight a critical disconnect between households’ intent to adopt and their eventual decision making that subsidies alone cannot bridge. Taken together, these results suggest that subsidies should be targeted to prospective adopters that attach higher value to the technology and for whom the technology is more appropriate.We suggest that future initiatives promoting such technologies should combine screening of prospective adoptees with subsidies to reduce barriers to adoption