Casting some light: how Free Basic Electricity has improved household welfare

> Expanding access to electricity has been a major achievement of post-apartheid South Africa, yet affordability remains a persistent challenge for low-income households. To address this, the government introduced Free Basic Electricity (FBE) in 2003, offering 50 kWh of free electricity per month to indigent households. The study on which this article is based provides the first quantitative analysis of FBE’s effects on household welfare since its inception. We find receiving the FBE subsidy is associated with a shift towards clean cooking, investment in essential appliances, and small but significant improvements in literacy, writing, and numeracy. However, the subsidy does not yet reach all its intended beneficiaries: we indicate that institutional weaknesses need to be addressed alongside review of the value of the benefit. Introduction South Africa’s post-apartheid electrification program is widely recognized as one of the most successful in the world. Between 1996 and 2014, the proportion of households with access to electricity rose from 54% to 86%. [1] However, while the programme successfully connected millions of households to the grid, affordability remained a major barrier for low-income families. Many newly electrified households could not afford to purchase electricity, forcing them to continue to rely on unsafe and unhealthy fuels such as paraffin, wood, and coal. These fuels have been found to have  severe health, environmental and socio-economic impacts . Energy poverty in South Africa manifests in the persistent use of unsafe fuels despite having access to electricity.  Free Basic Electricity In response to this challenge, the Free Basic Electricity (FBE) policy was introduced in 2003 as a measure to alleviate energy poverty. The policy aimed to provide a basic level of free electricity, set at 50 Kilowatt hours (kWh) per month for qualifying households. Policymakers considered this allocation  sufficient to meet essential needs , suc