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Slow regulatory approvals slowing down uptake of solar energy

By Macharia Kamau | February 21st 2017
A solar panel

The cost of building solar power plants has been declining globally but Kenya might not benefit substantially from this trend due to bureaucratic processes that result in projects taking unnecessarily longer initiation before commissioning.

Kenya has an abundance supply of sun and wind, and players have in the past cited the high cost of equipment as the major factor that stood in the way of the country exploiting renewable power sources.

Prices have however been on a decline for a while now, with solar equipment now retailing at 40 per cent cheaper compared to 2014 pricing. However getting licences to become electricity generator has proved to be a challenge for investors, which in turn slowed down the pace of developing large scale solar power plants that can feed the national grid.

According to the United States’ Energy Information Agency, production of electricity from wind and solar sources is growing, largely on account of reduced costs of installing power plants.

Prof Izael Da Silva Director of the Strathmore Energy Research Centre reckons that in addition to decline in the cost of equipment, Kenya has polices that are fairly friendly for investors eyeing renewable energy subsector. The policies largely on paper and execution has always been hampered by a slow regulatory approval processes.

“Prices of solar modules have come down by more than 40 per cent over the last three years. Storage is also becoming better and more affordable. This makes it possible for someone to invest in solar from household size to utility size plants,” he explained.

“Right now the main impediment is the regulatory aspect of it. It takes a lot of time to get all the approvals.”

“In theory, the laws are favourable. There is VAT exemption for solar modules and solar batteries. The application for generating less than one megawatt is theoretically quite simple. The main problem is that the speed with which the Government agencies work is quite different from the speed of business.”

He added that there is limited talent locally, which has had the impact of pushing costs up among people with adequate skills to work on solar systems. The Energy Regulatory Commission (ERC) recently published a list of 405 technicians that it has licensed this year. At 405, this is a fairly low number for an industry that is globally booming and providing substantial number of jobs.

“Another hurdle to the uptake of solar energy is the lack of technicians who are skilled in designing, installing and maintaining those systems,” said Prof Da Silva. Strathmore is among the few players that have developed its own solar power plants and is feeding excess electricity to the national grid.

Despite the setbacks in the regulatory approvals, industry players are confident of an increase in uptake of solar power in the country. Other than reduced cost of solar power modules in the global market, other factors that are expected to contribute to the growth include costly and unstable power supply from the electricity grid and a requirement by energy industry regulator to have all buildings install solar water heating equipment, a directive that is expected to increase demand.

Energy Regulatory Commission (ERC) has set May 25 this year as the deadline for all buildings that consume more than 100 litres of water per day to install solar water heating systems.

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