National rural electrification policies and programs, together with international donor programs, have employed renewable energy as an adjunct to "access" strategies. That is, serving increasing percentages of rural populations who don’t have access to central electric power networks. An estimated 360 million households worldwide still lack such access. The main electrification options include power grid extension, diesel generators connected in mini-grids, renewable energy connected in mini-grids (solar, wind, and/or biomass gasification, sometimes combined with diesel), and household-scale renewable energy (solar home systems and small wind turbines). Often the cost of traditional grid extension is prohibitive; in Kenya, for example, the average cost of a new connection for a rural home is seven times the national per-capita income.[N44]

Interest in using renewable energy technologies to provide electricity to rural and remote areas as a cost-effective alternative to grid extension is gathering momentum in many developing countries. At the same time, there is a growing recognition that private investment alone is insuffi- cient, and that public subsidies and policies play a key role, justified by development goals and public mandates for universal electricity access. "All our client countries in Latin America have told us that they have realized that they need subsidies and regulatory measures for reaching the ‘last 20 percent’ of their rural unelectrified populations, including with renewable energy," said a World Bank project manager.

Rural electrification programs in several countries, particularly in Latin America, are explicitly incorporating largescale investment in solar home systems for some of the homes to be electrified. Governments are recognizing geographic rural areas that are non-viable for grid-extension, and enacting explicit policies and subsidies for renewables in these areas to supplement line-extension electrification programs. For example, Brazil plans to electrify 2.5 million households by 2008 under the "Luz para Todos" program (about 700,000 have already been electrified), and has targeted 200,000, or about 10 percent of these households for renewable energy. As mentioned before, China’s "Township Electrification Program," which was substantially completed during 2004, provided power to 1 million people in rural areas with renewable energy. The Indian government’s "Remote Village Electrification Programme" has identified 18,000 villages for electrification, partly with renewable energy technologies like biomass gasifiers.

Several other Latin American countries have recently launched or revamped new rural electrification programs, including Bolivia, Chile, Guatemala,Mexico, Nicaragua, and Peru.Most of these countries have launched efforts to "mainstream" renewable energy as a standard option of new rural electrification efforts. For example, Chile has recently recognized renewables as a key technology as it enters a second phase of a national rural electrification program. Given this planned scale-up of renewables for rural electrification, regulators and utilities have realized that legal and regulatory frameworks need to be adopted quickly. Indeed, new laws or regulations appeared during 2004 and 2005 in Argentina, Bolivia, Brazil, Chile, Guatemala, and Nicaragua.

Asian examples of countries with explicit mandates for renewable energy for rural electrification include Bangladesh, China, India, Nepal, the Philippines, Sri Lanka, Thailand, and Vietnam. Some of these countries are financing programs with multilateral assistance, as well as conducting other technical assistance and support measures. The Philippines launched a strategy in 1999 to achieve full rural village electrification by 2007, including renewable energy explicitly in that strategy. Sri Lanka is targeting 85 percent of the population with access to electricity and has started to directly subsidize rural solar home systems. Thailand decided in 2003 to electrify the remaining 300,000 off-grid households in the country with solar home systems by the end of 2005, and accomplished almost half of that goal in 2004.