Alternative: Solar energy spells trouble for power firms

Energy Cabinet Secretary Charles Keter (centre) accompanied officials from the Rural Electrification Authority and National Asssembly during a recent tour of the 55MW Garissa solar Power Project. Different firms plan to install an additional 26MW of solar power this year. [Kurian Musa, Standard]

Power utilities are facing turbulent times with energy consumption trends changing.

Major power consumers are projected to increasingly adopt solar power and reduce dependence on grid electricity.

Despite the solar power plants being relatively small, many of them, with a generation capacity of below one megawatt, cannot be dismissed.

In the next decade, the plants are expected to grow and cause many large power sector players to miss on substantial revenues from their customers.

A new report shows that large power users are likely to install small solar powered plants for their internal use.

This is as a result of cheap solar equipment and a friendly tax regime for companies opting to take up the renewable energy source.

Solar investment

The report by BloombergNEF noted that the per-unit cost of solar power could come down from the current Sh14 to Sh7 by 2025.

This is in comparison to about Sh11 that industrial consumers pay for a kilowatt of power in Kenya and Sh16 for domestic consumers.

According to the report, Kenyan firms invested in installing about 15MW of onsite solar power. This year, different firms said they planned to install an additional 26MW, with manufacturers being among the players actively taking up solar.

“Kenya had an installed commercial and industrial solar capacity of some 15MW as of October 2018, according to data from five developers. Their pipelines suggest the market could add another 26MW by the end of 2019,” said BloombergNEF in the report.

A further analysis by BloombergNEF on Kenya’s power sector shows that by end of 2019, solar power could be contributing about six per cent of the power that manufacturers use during the day.

“The average commercial and industrial load in Kenya totals to about 650MW. That could mean that if the 2019 pipeline is fully built, solar could already account for some 6 per cent of midday commercial and industrial power supply in 2020,” said the report.

Moi International Airport in Mombasa is among organisations that have expressed desire to put up a solar power plant as it seeks less reliance on grid electricity. In Nairobi, Two Rivers mall will also be putting up a plant.