Shining A Light On Kenya's Solar Industry, This Interview Delves Into The Unique Challenges And Opportunities Faced By Operators In The Country

Can you highlight some of the unique challenges and opportunities you’ve encountered while operating in Kenya’s Solar Industry?

The Kenyan market for off-grid has some key benefits, such as a well-developed regulatory environment, certain tax exemptions on solar imports, and a history of private off-grid solar development. These factors can allow for lower risk on projects, as well as the ability to reasonably predict timelines for development as compared to some other markets, which can be critical for investor confidence. One big challenge is the 15km KPLC distribution line buffer zone, within which we are not allowed to pursue development. This eliminates many unelectrified communities, that would be viable off-grid solar sites, from private development. There are also portfolios of sites that have been identified and flagged for public development only, which still remain undeveloped after several years. If these sites were made available for private developers, we could quickly provide clean electricity. Unfortunately, the shielding of many productive areas from private development is resulting in very few viable sites left and thus eliminates Kenya at this time from being a large growth market for many private solar off-grid developers.

How does your company engage with local communities in Kenya to ensure that the benefits of solar technology reach those who need it the most?

Our business development and regulatory teams stay in close contact with County Governments to identify communities that remain unelectrified and which would benefit substantially from electricity access. From there, our dedicated community engagement team members collaborate with community leaders and committees once we have identified a community that fits our site selection criteria. Part of the engineering design process includes site surveys, which consider not only technical detail but also a survey of the community and engagement with community members to assess who wants to be connected, what kind of connection they want (commercial or residential), and what other institutions such as health centers, schools, water pumps etc. should be built into the design, even if they are out of the main distribution zone. Once developed, the site agents, hired from within the community, stay up to date on current customer needs as well as potential new customers, to ensure we are meeting their needs.

Could you discuss any specific policies or government initiatives in Kenya that have either facilitated or hindered the growth of the solar industry?

As mentioned earlier, certain policies are very helpful and initially helped the solar off-grid market grow in Kenya, such as a clear and well-organized regulatory process and the import VAT and duty exemptions on solar panels and batteries. Others, like KOSAP, a program funded by the World Bank in conjunction with the Kenyan government, aim to electrify a large number of underserved communities through publicly developed Mini-grids. Unfortunately, several years after the rollout, most sites remain unserved. If this was opened to private developers, we could quickly develop the sites and provide the energy they are in much need of. Similarly, the KPLC buffer zone which prohibits the development of unserved communities near or even under KPLC distribution lines has substantially hindered further growth in the market. When we look to where we can develop 50, 100, 200 mini-grid sites a year, we are looking to markets that have essentially opened all areas to private development and which have enough demand to support that kind of scaling up.

In your experience, what role do you see the Kenyan people playing in driving the adoption of solar technology?

Are there any notable success stories or examples of community involvement? We see innovation and acceptance of solar in all the communities we work in. In many places, we already see plenty of examples of solar products in use, from solar home systems to solar lights for night-time fishing or household use. Still, our solution provides a much more reliable option to communities, as we build solar plus battery storage solutions, allowing for very consistent access to electricity and the ability to power more than lights and phone charging. Our mini grids can power small businesses with fridges, freezers, small appliances, electric mills, and more. We see a high interest in transitioning from diesel-powered equipment like welding and milling, and we are able to work with customers to find the best option that can tie in with our Mini grid. As the cost of diesel continues to go up, there is an obvious draw to solar, and our customers are no exception in seeking more ways to use solar power for their home and business needs.

Can you share any innovative technological solutions or advancements your company has implemented to overcome specific challenges in the Kenyan market?

One way we have eased what can be a complicated and risky operation is our payment process. We have developed an in-house integration between our meters and the Kenyan payment platform, M-PESA. All of our customers have a unique meter serial number and customer account number and can make payments in any increment using M-PESA. Within seconds of the payment being made, the corresponding units are credited into the meter and ready for use. This easy pre-payment process ensures that our customers can buy energy on demand, at any time of the day or night, and that we do not have to handle cash payments or defaults.

Due to the remote locations of most of our sites, our ability to monitor system performance remotely is also critical to our success. We have integrated all aspects of our powerhouse and customer smart meters so that we can troubleshoot from afar and quickly relay needs to the on-site agent and technical team to solve problems in real-time. Our system monitoring collects thousands of data points every hour, and we use this to enhance site performance. For example, we can adjust tariffs based on the optimal consumption at various hours of the day, encouraging more daytime use when we have the most capacity.

Another example would be our Productive Use of Energy projects. We work with communities individually to determine what additional services can be integrated into the mini-grid, such as connecting community boreholes, bringing water purification services, or helping business owners transition from diesel-powered mills to electric mills. All of these are done in collaboration with the community to ensure success within our grid’s capacity and their business or community needs and leverage our ability to connect with manufacturers and other businesses to introduce new products or equipment that might otherwise not be introduced in these areas. In many cases, we can align these services to operate when a grid has excess capacity, using our remote monitoring systems to detect and optimize the timing and prices of certain services.

How do you navigate the regulatory landscape in Kenya, and what measures do you take to ensure compliance with local policies and regulations?

The regulatory processes in Kenya are generally clear and straightforward. We follow the processes as outlined in terms of getting the right permits and licenses at each stage of development and construction, from community MOUs to construction permits to distribution and electricity sales licenses to tariff approvals. It’s important to maintain good relationships with all levels of government and leadership- from national to county to community levels. We work closely with our partners on each level. This builds a good long-term relationship, which is critical as we will operate our sites for at least 20 years, and also helps us stay aware of any changes in the process that we need to adapt to. We have been operating in Kenya for over 8 years, with 24 sites currently and growing in 2024 to over 20,000 connections. Relationships and compliance are very important to our ongoing success.