Factors that influence the adoption of LPG as a modern energy in Kenya: a survey of household consumers in Nairobi County

Submitted in partial fulfillment of the requirement for the Degree of Masters Business AdministrationEffort to influence the adoption of cleaner energy sources and to reduce dependency on traditional sources of energy in households in developing countries has been largely unsuccessful. The population dependent on traditional energy in developing countries is expected to increase in spite of traditional energy sources having adverse effect on the environment and health of users. In Sub Saharan Africa studies on adoption of modern energy have mainly focused on the effect of household income and expenditure. Factors such as consumer characteristics, distance to fuel source and availability of the fuel have been ignored. This research bridges this knowledge gap by determining the current energy use among household consumers in Nairobi County and identifying factors that are barriers to the adoption of modern energy. The consumer characteristics such as age, education, gender and cultural orientation and other factors such as household size, total household cost of fuel, availability, the distance to retail outlets and access to information on clean energy sources are examined. This study conducted within the theoretical framework of fuel stacking, fuel switching models and Rogers Innovation Diffusion Theory is a quantitative survey using a stratified sample from low, middle, and high income households with Key Informant Interviews used to validate the data. Statistical Analysis Software is used to analyze data at three levels: univariate, bivariate and multivariate. Key findings are that income is not a statistically significant factor of fuel switching as consumers with high income tend to stack or use a combination of fuels. The majority of middle and high income households use LPG either as the only source of fuel or in combination with other fuels. There is a positive relationship between gender, age, household size and the cost of fuel to the choice of the fuel used in the household in urban areas. The key recommendations are; first, need for education and dissemination of information, to emphasize LPG‘s potential to increase productivity, wealth generation. Second, need to encourage entrepreneurship in LPG with the aim of attracting investors with resources and technology. Third, marketing strategies should focus on the consumer characteristics that influence modern energy choice. Fourth, need to shift focus from the branded cylinder as a marketing or proprietary tool to sell LPG