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What does VAT exemption mean for SunnyMoney in terms of operations and distribution of the solar light and the economy?
Removing VAT on solar products reduces the cost to consumers and aids their accessibility to everyone. The poorest people need to access solar lights and phone chargers at the lowest price possible, and the exemption helps them afford these. Adding VAT in September 2013 prevented more Kenyans from affording solar lights and slowed down the growth of new technology getting into the market.
How much is the exemption going to save SunnyMoney and end users?
The savings for SunnyMoney are not significant since VAT is a tax paid by the end user. The exemption will further stimulate the market and improve solar equipment access to more people since our line of pico solar products will be more.
What benefit will it have for your clients?
The benefits to Kenyans and national economy will be substantial. 100 per cent of the benefit of the exemption will be passed on to our customers. We will also be able to reach more clients in off grid areas throughout Kenya with these price decreases. UNEP have calculated that Kenyans would save as much as $896m (Sh78.683 billion) per annum if the country switched to clean sources of off-grid lighting. We have sold over 300,000 solar lights in Kenya and plan to sell another 300,000 lights in the country this financial year — through school campaigns and independent agents.
That means each family with a solar light saves money spent on toxic, expensive kerosene. They will now have reliable, bright light each night hence improved study time, better health and a safer, cleaner environment. SunnyMoney has reduced prices by 16 per cent, the same amount the VAT tax added to the price last September. Our independent agents will be able to purchase and sell lights and phone chargers at reduced prices, further stimulating the economy in areas such as Nairobi, Bomet, Kericho, Bungoma, Trans Nzoia, Kakamega, Uasin Gishu, Vihiga, Nandi, Mombasa and beyond.
How long is the exemption?
There is no end date specified in the Bill.
How was the exemption achieved and who did the lobbying?
Lighting Africa’s Country Officer, Nana Asamoah-Manu and Kerea, a trade organisation, led the lobbying. Both were influential in lobbying the Government along with Suba MP, John Mbadi who gets the praise for moving the motion in Parliament, which led to its adoption by the house.
What impact will this have on the energy sector and economy at large?
It will be easier for Kenyans to buy solar products, which have many direct benefits. Every time we sell a solar light, our customers stop using kerosene based lighting; saving, on average, up to 25 per cent of their monthly earnings. That money stays in the local economy and is spent on better nutrition, school fees and business or farming inputs instead of leaving the country in foreign exchange to multinational oil companies. We are thrilled that the prices of solar equipment such as solar irrigation pumps, water heater and larger home systems will be reduced and more accessible for consumers.
What’s the future of solar energy?
We are proud to see the government taking low carbon technology seriously, stimulating demand, lowering the barriers to entry. There is additional legislation in discussion that will benefit the solar industry especially large-scale solar systems.
What other interventions are needed to promote the use of solar energy in Kenya?
Increasing awareness is still a need as there are millions of households in Kenya still using kerosene.
