Increasing electricity access remains a challenge, particularly in rural areas of sub-Saharan Africa. This study examines the case of Tanzania, where connection rates remain low even among rural households residing ‘under the grid’, and this despite substantial government subsidies for household connections. Using data from 1,774 rural households living within reach of the electricity grid, we investigate correlates of the low grid electricity uptake. We find that proxies for wealth are positively associated with connection status, while social network variables are less so. Capacity to pay thus appears to remain a major barrier, and in-house wiring costs emerge as a significant expense unaddressed by the existing subsidy scheme, exceeding grid connection costs sevenfold. Similar mechanisms influence the choice between grid electricity and traditional or solar energy sources. These findings inform the ongoing policy debate on subsidy design and the role of alternative energy sources in expanding access.