This paper estimates the returns from increased access to electricity in rural India on household income. We examine the eect of connecting a household to the grid (the extensive margin) and the quality of electricity, in terms of daily hours of supply (the intensive margin). The analysis is based on two rounds of a representative panel of more than 10,000 households. We use the district-level variation in land elevation and the district-level density of transmission cables as instruments for the electrification status of the household. We find that a grid connection increases nonagricultural incomes of rural households by about 20-30 percent during the study period (1994-2005). However, a grid connection and a higher quality of electricity (in terms of fewer outages and more hours per day) increases non-agricultural incomes by about 85 percent in the same period. This is equivalent to an income growth of about 8 percent per year. Moreover, marginal returns from average daily hours of supply are highest at very low and very high levels of daily supply, not over a wide range in-between.