Snehar Shah, General Manager of East Africa at Azuri, looks at the role that solar power can play in Kenya’s economic future and development and the need for policy to support further investment.
Solar is a proven alternative to meet the rising needs for electricity
The one-time view in Kenya that the electricity grid would eventually reach every nook and cranny has been replaced by an acceptance that alternative innovations are needed alongside traditional infrastructure.
Solar is a proven affordable alternative to help meet the rising needs for electricity, complemented by Kenya’s abundant daylight hours.
While the grid continues to serve the high-density population, solar energy continues to make its business case in the rural areas. In particular, revolutionary pay-as-you-go solar solutions using the power of mobile technology are delivering huge benefits socially and economically with new data showing that solar can boost household incomes on average by USD35 per month. Not to mention the impact on education, with children able to spend more time on studies, and how solar is inspiring entrepreneurial ingenuity.
In little over five years, solar has gone from simply replacing kerosene and candles with safe reliable lighting in homes, to helping accelerate understanding and knowledge through connection to satellite TV and radio.
Yet in many ways, solar energy remains the uncelebrated influencer.
The visit to Kenya in September by the UK Prime Minister Theresa May is likely to shine the spotlight back on solar as solar energy investments will be key in the Prime Minister’s trade discussions with the Kenyan President Uhuru Kenyatta.
Solar can play a crucial role in ‘nation building’
As Kenya races towards an energy-sufficient future, driven by Kenya Vision 2030 and Government’s ‘Big Four’ agenda set around housing, manufacturing, agriculture and health, there are many opportunities for solar energy to help secure the country’s economic future.
For the sake of Kenya’s long-term development, solar energy must be fit into the equation as a viable technology playing a crucial part in nation building.
The target to deliver one million affordable homes under the government’s ‘Homes Program’ for example offers a huge opportunity for the Ministers to work with solar energy players who have the capacity to design and install solar systems at scale, and also carry out necessary maintenance.
The fact that the Government has in its recent past installed solar solutions in public institutions and most recently partnered with World Bank to roll-out the Kenya Off-grid Solar Access Project (KOSAP) to benefit 14 counties, is a vote of confidence for off-grid solar solutions.
And there is further optimism for solar providers, with the Kenyan Government partnering with private sector enterprises through arrangements such as Public-Private-Partnership to solve the nagging electricity gap.
In manufacturing, there are two clear opportunities for solar companies. The immediate opportunity is to provide solar solutions for public infrastructure utilities enabling manufacturing. The longer-term opportunity is a futuristic manufacturing phase, gravitating towards high-value industries such as electronic manufacturing. This means that commercially-distributed solar home systems (which typically consist of wiring, rechargeable battery, lighting systems, and connection cables) could be manufactured locally in the not-so-distant future.
Lastly, Kenya’s ‘Food Security Bill’ aims to enhance large-scale production, increasing smallholder family farming productivity and reducing the cost of food. The government should certainly consider tried-and-tested, cost-saving agricultural solar-power solutions that help boost yield productivity and profitability.
A reformed regulatory environment around the renewable energy sector is key
Despite the global viability and growth in the solar energy market, African countries, including Kenya, continue to lag behind.
For solar energy investors to sustainably participate in Kenya’s quest for an economic renaissance, regulatory obstacles holding back the sector must be eliminated.
Policies that provide an ‘enabling environment’ for growth and finance are needed if solar is to reach its potential.
But Kenya has a way to go to provide such an environment given the Energy Regulatory Commissions’ ‘Least Cost Development Plan’makes no provision for the generation of electricity from solar energy resources in its forecasted 20-year plan.
Exorbitant financing lending rates have also conspired against the sector’s players with many companies forced to raise capital from afar.
Azuri, for instance, has raised its financing through various investment vehicles from commercial partner investors, mostly foreign, to the tune of over KES2 billion to finance its operations.
In that period, Azuri has sold over 150,000 solar home systems, impacting over 750,000 lives.
Yet, the existing energy implementation plans have no tangible strategy on enabling participation of local investors and budding entrepreneurs in the sector.
If Kenya is to achieve its renewable energy target of 175 GW by the year 2022 and turbocharging the country into a globally competitive and prosperous economy with high quality of life for its people, then it needs to put solar energy at the forefront of the conversation.
Energising homes around Kenya by providing access to safe, affordable and reliable electricity is a cherished dream not only shared by the Kenyan Government but also by solar pioneers, like Azuri, which have been helping address the many challenges outlined in the ‘Big Four’ agenda through its innovative solar solutions and services.