OVERSIGHT

State drafts tough rules for solar energy

Move seen to protect Kenya Power which continues to drop profit.

In Summary

•In the Draft Energy (Solar Photovoltaic Systems) Regulations, 2020, the government has set tough licensing and operational conditions for solar investment in the country.

•This week,the Senate Committee on Energy questioned the regulations, cautioning that the rules could slow down the uptake of solar energy in the country.

Solar panels at a solar carport at the Garden City shopping mall in Nairobi/FILE
Solar panels at a solar carport at the Garden City shopping mall in Nairobi/FILE

The Energy and Petroleum Regulatory Authority (EPRA) has moved in to police the solar energy sector in what could slow down uptake of the clean energy by industries.

This is in a move seen to try and protect Kenya Power from competition, as revenues continue to fall despite the company enjoying monopoly.

In the Draft Energy (Solar Photovoltaic Systems) Regulations, 2020, the government has set tough licensing and operational conditions for solar investment in the country.

For instance, a person shall not engage in the importation, manufacture, sale or installation of solar PV systems or solar PV system components without a valid license issued by EPRA.

The Authority shall, from time to time, publish a notice setting out the types of solar PV components and solar PV systems to which the regulation applies.

Products must also conform to the Kenya Standard.

“A manufacturer or importer of solar PV systems, components, and consumer devices shall ensure that the products conform to the relevant Kenya Standard set out in the Seventh Schedule or any other subsequent or applicable Kenyan Standards,” the regulations read in part.

A manufacturer, vendor or importer of solar PV systems shall not offer for sale solar PV products, components, and consumer devices without the appropriate safety and health warning labels being affixed.

Consumer devices must also be registered with the authority.

This means manufacturers or importers of solar PV consumer devices shall have their products registered by the authority on meeting the requirements of relevant Kenya Standard or other equivalent international programmes for such products.

EPRA is also determined to decide which products are allowed into the Kenyan market.

According to the authority, the regulations are aimed at streamlining the manufacture, importation, distribution, design, installation, testing, commissioning, maintenance and repair of solar systems in Kenya.

A solar technician is required to pay between Sh2,250 and Sh6,000 to obtain and renew a licence under the regulation.

A contractor, on the other hand, will pay between Sh3,000 and Sh6,000 for a licence, which will be valid for three years, with practitioners required to apply for renewal one month before the expiry.

Both technicians and contractors will also be required to obtain insurance policies for their licences of between Sh1 million and Sh10 million, based on their respective licence categories.

A fine of Sh50,000, per day, will be imposed on anyone practicing with an expired licence.

The stringent proposed regulation also includes a Sh10,000 fine if individuals delay renewing their license and Sh20,000 if they do not issue a completion certificate for a project or warranty for installation.

Additionally, penalties on failure to provide data to EPRA or providing false data will range between Sh5,000 and Sh1 million.

Licenses are based on the capacity of the system to be installed. License classes SPW1, SPW2 and SPW3 are for solar systems with a capacity of not more than 400 watts, 2kW and 50kW respectively. Only SPW4 technicians will be allowed to install solar grids of any capacity.

This week, the Senate Committee on Energy questioned the regulations including relatively high licensing fees.

Committee chairman Ephraim Maina cautioned that the rules could slow down the uptake of solar energy in the country.

The committee has noted that the regulations are deliberately designed to protect some energy sector players, with Kenya Power being the biggest beneficiary.

Manufacturers in the country have been decrying high cost of power which is making Kenya uncompetitive.

A number of industry, businesses and developers have incorporated solar energy systems in their projects, reducing dependency on the main national grid served by Kenya Power.

The listed company which enjoys monopoly in the country has delayed releasing its financial results amid a profit warning, as it blames Covid-19 for reduced electricity consumption.

It sough the Capital Markets Authority's approval to delay publishing its full-year audited results, expected on or before end of January next year.

It was required to have published its financial statements by October 31, as per the Capital Markets-securities, public offers, listing and disclosure regulations.