Rural electrification is considered to be a key strategy for poverty alleviation and sustainable development. It should therefore include (1) expanding electricity access and (2) enable new consumers to increase their electricity consumption. In this paper we ask how Brazil’s recent rural electrification efforts have managed to reach these objectives. A new method to measure energy and income equity is presented which uses estimations of non‐parametric density curves for the analysis of energy and income distributional trends following electrification. By applying our method to a panel data set from two Brazilian states situated in the country’s poor northeast region we find that (1) rural consumers take up electricity consumption after electrification, and that (2) low consumption levels give way to higher electricity consumption levels after only a few years. This indicates immediate social benefits for households through consumption of electricity services. However, our analysis cannot verify a direct link between electricity use and rural income generation in the short term. The results emphasize the need for government and other actors to integrate rural electrification into broader rural development strategies in order to enable long‐term welfare increases through electricity use.
