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February 26, 2018

Outdated policies, high taxes discourage uptake of solar

Solar panels are pictured at a solar carport at the Garden City shopping mall in Kenya’s capital Nairobi /REUTERS
Solar panels are pictured at a solar carport at the Garden City shopping mall in Kenya’s capital Nairobi /REUTERS

 Outdated policies in the energy sector and taxes have discouraged uptake of solar power in the country, an industry stakeholder has said.

M-kopa chairperson Mugo Kibati said the current policies do not constitute what is needed in the sector.

“There is outdated thinking towards what constitutes the solar industry and therefore where do we have necessary incentives and exemptions on tax,” Mugo said, adding that the current policies are rather narrow especially on photovoltaic solar panels.

He said the government should engage the private sector, policy makers and industry players when forming policies that support an improved uptake of solar powered appliances.

According to a 2017 research by the Kenya Climate Innovation Centre, government policies do not specify the role of solar PV for Solar Home Systems (SHS) in “pre-electrification” of areas proximate to the grid.

“Unlike Tanzania or Uganda, Kenya does not provide incentives or subsidies for household solar PV systems,” the report states.

The report continues to say that lack of an appropriate policy limits PV implementation to public sector procurement in remote areas where there is little commercial interest while on the other hand it does not provide a role for PV in support of grid electrification in high potential areas.

Other outstanding barriers in the adoption of solar PV in the country include lack of skilled technicians, as those in the field do not have formal skills, and yet they have connections with solar distributors and retailers who subcontract them, and economic barriers such as regional competition, difficulty in accessing finance, low purchasing power of consumers and rising counterfeit products build on the already strained market.

Since its launch in 2011, M-kopa has connected atleast 500,000 homes to solar power panels, and about 90,000 solar rechargeable televisions.

They intend to local source and distribute over 500,000 solar panels in the next two years subject to market and regulatory conditions. They have so far installed 100,000 of such panels which powers their TV solar home system.

In the last two years they generated 1.85 megawatts of off-grid power direct from rooftops across East Africa. They aim to generate 6.6 megawatts of power, over the next two years.

Statistics from the innovation centre indicate that about 25,000 to 30,000 solar PV products are traded annually in the Kenyan market while every household has owned at least one solar PV product.

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