This paper uses a meta-analysis to investigate the challenges of decentralized electrification for economic development. It uses an original database which has evaluation data on more than 400 projects. Technological innovations, notably for solar energy, are opening new space for electrification policy, based on off-grid systems, which are particularly relevant for remote rural areas. However there are two main challenges. Firstly due to the threshold effects associated with the size of the projects based on nano size systems, typically the popular Solar Home Systems (SHS). Nano systems do not reliably lead to the transformation effects which are necessary to ensure economic sustainability. This may lead to a poverty trap. Secondly the bigger the system, the bigger the need to organize collective action for planning, installation, and management. This collective action requires proper governance structures, which can be designed using Ostrom’s framework for the management of common pools of resources.
