This report looks at barriers to improved energy efficiency and to increasing use of renewable energy for households and small businesses in developing countries (see Terms of Reference in chapter 7.1). The development goal in question is establishment of sustainable energy services. This is when the end users are able to cover their main energy service needs in an efficient and responsible way by introducing measures for improved efficiency or based on renewable energy resources. 

With energy efficiency we are thinking of energy utility per unit energy consumed. So with improved energy efficiency we are referring to a reduction in energy consumption for a specific location, task in the household or production cycle. We are thinking specifically about efficiency gains through modernization of traditional energy uses such as improved cooking stoves. In addition, increased efficiency may be achieved through improvements in energy delivery through the existing grid. 

When we speak of renewable energy in this report, we are thinking of energy that is accessed through decentralized and small-scale technologies that are environment and climate-friendly. We are thinking of electrification through off-grid solutions and the implementation of technologies that make use of new, local, renewable sources, i.e. sun, biogas/-fuel, wind and micro-hydropower stations. We will not, however, go into detail with respect to the various renewable energy technologies and solutions. 

Sustainable energy services is a wider notion than energy efficiency and renewable energy. A sustainable energy service has to be sustainable in the ecological, economical and technical sense. Economical and technical sustainability is often as hard to obtain as ecological sustainability, especially for many electrification projects.

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