Previous studies have shown that provision of sustainable electricity supply to rural households is essential to bring development to off-grid populations. For this reason, most developing countries put large efforts into rural electrification programs to stimulate development and reduce poverty. However, to be sustainable these programs need to recover costs, which poses a challenge to remote low income populations.  This often forces governments and other institutions involved in rural electrification to subsidize the electricity production. It also affects the choice of technology and places a barrier on the level of energy provided in line with the ability to pay for services. As a result of this, most programs have failed to achieve the desired objectives, as the technologies used often do not support income generating activities that could increase the payment capabilities of the beneficiaries and contribute to development. This thesis is focused on the rural electrification program of South Africa, the country in sub-Saharan Africa that has the highest access to electricity. It investigates the success elements that influence the sustainability of rural electrification programs and their contributions to socio-economic development. This was achieved by evaluating the South African program that provides solar home systems to off-grid communities, and a hybrid solar-wind mini-grid project in South Africa. The study also draw lessons from other rural electrification programs in neighbouring countries, i.e. an evaluation of a hybrid solar-diesel mini-grid system in Namibia, and a review of two systems, a hybrid solar-biomass mini-grid project in Botswana and a hydro mini-grid program in Lesotho. The study revealed that hydro based hybrid mini-grid systems provide the most cost effective way of bringing energy services to rural settlements. Regardless of technology, successful programs depend on adequate support from the government, implementation of a progressive tariff system that allows the high consuming high income earners and businesses, to cross subsidize the low consuming , low income users. It shows that it is more likely for rural electrification programs to survive if the design considers the existing businesses, population growth and the corresponding load increase. The thesis further shows that provision of sufficient energy to induce income generating activities is essential to decrease the need for subsidies and to ensure the sustainability of programs. In addition, availability of spare parts and a capable management team is essential for the successful operations and maintenance of these systems.

Electricity is a fundamental energy carrier for modern life and for economic prosperity. All kinds of equipment use electricity as their power source, including domestic and industrial applications. There is a trend to adopting more electricity-based equipment in all areas. The modern power infrastructures can sufficiently supply most cities and developed areas. However, certain rural areas are still unable to get access to electric power due to the inconvenient locations or less developed economy. This makes the living conditions in such areas extremely inconvenient and further hinders the economic development in those areas.Electrification for rural areas has been a critical task for some developing countries. To accomplish this task, the options are limited to build a stand-alone power system or construct a power transmission line for the chosen location. A stand-alone power system has commonly been based on fossil fuel, such as a diesel generator, with low capital cost compared to a long connection, but with significant running cost of fuel. Recent improvements of renewable sources and storage, and more efficient loads, have made renewable sources much more competitive than before for a stand-alone electricity supply. The choice between different renewable energies depends on the local natural resources. It is a more flexible way to providing the electricity and a more efficient and environmental-friendly way since the energy loss caused by transmission is eliminated. On the other hand, the grid connection option involves building a transmission line to connect the rural area to the national grid, which is a more traditional approach to provide power. The cost of this method depends on the relative distance between the rural area and the nation grid.The choice between the above two mentioned electrification options is the first step when considering providing power to the rural area. This thesis focuses on the electrification for rural areas and comparing the above two methods, finding out the break-even point. It is of current interest as the technology for both options is changing, and the break-even is also changing.In this thesis, a mathematical model for on-grid electrification is proposed and simulated on MATLAB. The off-grid option is simulated by HOMER. The results show how the LCOE of on-grid and off-grid electrification as well as the off-grid configuration are affected by different parameters like the distance to grid, load demand level, PV cost, WT cost, storage cost, the diesel price and so on. By comparing the results, the break-even point of two options is also presented. / Elektricitet är den viktigaste energibäraren för det moderna livet och för ekonomiskt välstånd. Många typer av utrustning använder el som sin kraftkälla, i hushållet såväl som I industrin, och det finns en tendens att öka användning av el inom alla områden. Moderna elnät levererar till de flesta städer och utvecklade områden. Dock har vissa landsbygdsområden fortfarande inte elförsörjning, på grund av svårtillgängliga områden och mindre utvecklade ekonomier. Detta gör att levnadsförhållandena i sådana områden är lägre än om man hade haft tillgång till el, och ytterligare hindrar den ekonomiska utvecklingen i dessa områden.Elektrifiering för landsbygdsområden har varit en viktig uppgift för vissa utvecklingsländer. Två extrema fall är att bygga ett fristående lokalt kraftsystem, eller att bygga nya kraftledningar för att ansluta till ett befintligt elnät. Ett fristående kraftsystem har historiskt sett typiskt berott på fossila bränslen, till exempel med en dieselgenerator, vilket ger lägre kapitalkostnad än en lång ledning, fast med betydande driftskostnader för bränsle. De senaste förbättringarna av förnybara källor och lagring, samt effektivare laster, har gjort förnybara källor mycket mer konkurrenskraftiga än tidigare för en fristående elförsörjning.Valet mellan de två ovannämnda alternativen är det första steget när man elektrifierar ett landsbygdsområde. Denna uppsats fokuserar på elektrifiering för landsbygdsområden och jämför dessa två metoder. Det är av aktuellt intresse eftersom tekniken för båda alternativen är i förändring.I denna uppsats, en matematisk modell för on-grid elektrifiering är föreslås och simuleras på MATLAB. Alternativet off-grid simuleras av HOMER. Resultaten visar hur LCOE av on-grid och off-grid elektrifiering såväl som nätverkskonfigurationen påverkas av olika parametrar som avståndet till rutnätet, lastbehovsnivå, PV kostnad, WT kostnad, lagerkostnad, dieselpriset och så vidare. Genom att jämföra resultaten, jämnpunkten av två alternativ är också presenterad.