Global industry lobby says pricing went up following return of VAT last year.

Solar power water pump. It helps to cut costs [File, Standard]

Solar appliance sales in Kenya fell by 16 per cent from July to December last year, a report on off-grid solar marketing in the region has revealed.

Data by Gogla on semi-annual sales shows key appliance sales for East Africa shrank by five per cent to 123,000 units compared to the first half of 2021, where Kenya’s drop translated to 77,379 in form of TVs, fans, solar water pumps (SWPs) and refrigeration units.

Kenya's off-grid market plays a key role in this drop. The region recorded particularly low sales of refrigeration units (449) and relatively stable SWP sales (4,400),” the report said.

Gogla is the global association for the off-grid solar energy industry and is based in Amsterdam, The Netherlands. It promotes the adoption of off-grid solar and efficient appliances.

The lobby attributed the drop to the Kenya market reacting to the move by the government in 2020 to reinstate 14 per cent value added tax on off-grid solar products and subsequently increasing it to 16 per cent in January 2021.

“Recognising the key role of decentralised renewable energy solutions, such as solar home systems, in providing 100 per cent of Kenyans with access to electricity, the tax exemption was reintroduced, but products in stock during the second part of 2021 were likely still affected by the price increase and uncertainty around the enforcement of taxes may have also contributed to affecting pricing during the period,” the report said.

The data showed that appliance sales in East Africa represented 50 per cent of total sales in Sub-Saharan Africa, down from 54 per cent in the last reporting round.

The findings come also on the back of global sales volumes of lighting products such as solar lanterns, multi-light systems and solar home systems for the second half of 2021 reached almost four million units.

“This is a 15 per cent increase in volumes compared to the first half of 2021, though still 10 per cent below where global volumes stood during the second half of 2019 before the pandemic.”

Further, while both cash and Pay Go (installment) sales have grown compared to the previous data collection round, Pay Go has been the main driver of the upwards trend in 2021, well surpassing 2019 levels.

“Volumes recorded for Pay Go increased by 27 per cent compared to the first half of 2021 to exceed 1.5 million units. A main contribution to this growth is a shift towards more sales of Pay Go solar lanterns," Gogla noted.

Global sales for other appliances, however, decreased by 20 per cent compared to the first half of the year to 338,000 units sold between July and December 2021.

“This is mainly driven by lower reported sales of fans in key Asian markets, but also by stagnation in TV sales - particularly driven by lower sales in Kenya, the largest market for this appliance,” the report said.

[email protected]