How Does the Unequal Adoption of Solar Power Trigger a Pricing ‘Death Spiral’ in Lebanon’s Informal Generator Cartels, and What Are Its Effects on Middle and Low-Income Households? An Agent-Based Simulation

Lebanon's 2019 economic collapse left the country's electricity sector in crisis. The state utility, Électricité du Liban, provides only around three to four hours of power per day, forcing households to depend on private generator cartels that charge unregulated prices, while solar energy has begun to emerge as an alternative for those who can afford it. This paper uses an Agent-Based Model to simulate how 500 households across five income brackets interact with these three energy sources over a six-year period. The simulation produces several findings that were not built into the model's rules, the most significant is that middle-income households, not the poorest, end up carrying the heaviest energy burden. Low-income households ration almost immediately, while wealthier households escape to solar, leaving the middle class to absorb rising generator costs in what this study terms "the death spiral." A One-At-a-Time sensitivity analysis shows that generator cartel greed has the largest effect on energy poverty out of all parameters tested, and that tighter enforcement of existing tariff regulations alone could ease the pressure on the most affected households. The model's parameters map directly to real policy decisions, making it possible to simulate the effects of regulatory changes before they are applied.