Almasola

By: Purity Ngasi, Energy Engineer, Kenya

Introduction

The off-grid energy market is more than just a business; it is a crucial bridge to achieving Sustainable Development Goal 7 (SDG7) – universal energy access for all by 2030. In the energy sector, Kenya has made substantial strides in rural electrification access, where in 2023, estimates Indicate more than 75% of rural electricity access rate off-grid connections (EPRA, 2023). The figure below shows the positive trend of electricity access in Kenya in the financial year 2022/2023 with a 2% increase in connected customers to the grid (EPRA, 2023).

Figure 1: Electricity access rate from July 2022 to June 2023. Source: Energy & Petroleum Statistics Report (2023)

Lack of electricity hinders basic human needs, from education to health and to generating income. Off-grid energy solutions, like solar home systems and mini-grids, are the answer for millions living in underserved areas. These innovative approaches offer businesses and households a path out of the energy gap.

Kenya has a very high potential for solar energy technologies and a thriving market for standalone solar photovoltaic systems thanks to government support, a favorable enabling environment, and the successful rollout of pay-as-you-go solutions. These conditions resulted in 58% of solar energy kit sales in 2023 using cash and PayGo systems. The figure below shows the evolution of sales volumes of solar energy kits from 2021 to 2023.

Sales Volumes of Solar Energy Kits – Kenya

Figure 2: Semi-annual Evolution of Sales Volumes of Solar Energy Kits –Kenya. Source: GOGLA.

While traditional grid expansion might have limitations, Kenya is embracing off-grid and decentralized energy systems as a powerful alternative. This approach is gaining traction across the continent, as highlighted by IRENA’S 2023 report on off-grid renewable energy, demonstrating continued growth despite the challenges of the COVID-19 pandemic. Kenya’s off-grid connections have increased by 5% between 2019 and 2021. This increase resulted in 23 million people with rural electricity access in 2021 contributed by the regulatory and policy frameworks for off-grid, and mechanisms such as Pay-As-You-Go IRENA’S 2023.

Projects like KOSAP and PAOP fuel Kenya’s remarkable progress in energy access. These initiatives provide crucial financial support, often through innovative Pay-As-You-Go models. This empowers rural customers to access clean electricity and unlock a brighter future.

Initiatives

Kenya champions off-grid and mini-grid solutions, exemplified by the World Bank’s Lighting Africa initiative. Launched in 2007 to address the global challenge of energy access for approximately 1.2 billion people lacking electricity, Lighting Africa has bolstered rural electrification in Kenya, with the country’s rural electrification rate reaching 39.3% by 2018. An estimated 9.8 million Kenyans have benefited from this program (Lighting Global, 2018).

Policies and regulation

The Kenyan government is implementing several supporting policies, incentives, and regulations for off-grid technologies such as:

1. Tax Breaks: Import duties and VAT have been waived on solar photovoltaic products, making clean energy technologies more affordable for Kenyans.
2. Mini-Grid Regulations: The Energy (Mini-Grid) Regulation, 2021 establishes a clear framework for mini-grid development. This regulation applies to systems up to 1MW and ensures transparency and collaboration between owners, operators, and the public.
3. Feed-in Tariffs: The Energy Act 2019 promotes renewable energy development by implementing feed-in tariffs. These tariffs incentivize individuals and businesses to invest in clean energy generation.

The main government agencies involved in promoting off-grid technologies and mini-grids are the Rural Electrification & Renewable Energy Corporation (REREC). REREC was established by the Energy Act, 2019 with a central role in promoting and developing off-grid solutions in Kenya through offering financial support, advocating policies, and technical assistance to local communities and companies involved in off-grid projects.

The Energy and Petroleum Regulatory Authority (EPRA) is the regulator for the off-grid sector in Kenya. Its mandate includes licensing, economic and technical regulation, enforcement, and compliance, and dealing with disputed regulations (EPRA,2023). It monitors the performance of off-grid systems and enforces regulations to ensure safety and quality standards. The Ministry Of Energy (MOE) formulates policies, sets guidelines for the sector, and guides rural electrification. It sets the overall direction for the off-grid sector by developing and adopting policies and regulations that promote renewable energy and support off-grid solutions. MOE Collaborates with other agencies like REREC on funding and capacity-building programs.

Kenya Off Grid Solar Project

Kenya’s booming market for standalone solar systems provided the perfect springboard for the ambitious Kenya Off-grid Solar Project (KOSAP). Launched in 2019 by the Ministry of Energy with World Bank funding, KOSAP brings clean electricity and modern cooking solutions to remote communities (KOSAP, 2024). This project is implemented jointly by Kenya Power and Rural Electrification and Renewable Energy Corporation to provide universal electricity access in Kenya by 2030.

Figure 3: KOSAP targeted 14 counties. Source: KOSAP

Targeting fourteen counties in Kenya’s northeastern and coastal regions, including Turkana, Garissa, and Kwale, KOSAP aims to install a quarter-million standalone solar home systems and 120 mini-grids by 2030 State Department for Energy (2030). This ambitious project, with a budget of $150 million (IEA, 2023), will transform lives across the region.

KOSAP does not stop at national borders. Recognizing the needs of refugees and their Kenyan hosts, the project receives additional support from the Kakuma & Kalobeyei Challenge Fund (KKCF). Established by the International Finance Corporation (UNHCR, 2019), KKCF is the first program of its kind in Sub-Saharan Africa, unlocking economic opportunities for refugees and their hosts in Turkana County’s Kakuma-Kalobeyei refugee camp, home to over 200,000 people from Eastern and Central Africa.

Thanks to the combined efforts of UNHCR, EnDev, and the Turkana County government, two mini-grid systems now provide clean energy and modern cooking solutions within the camp. KOSAP, with its innovative approach and collaborative spirit, is illuminating the path toward a brighter future for Kenyans and refugees alike.

Power Africa Off-grid Project (PAOP)

The Power Africa Off-grid Project (PAOP) is a four-year initiative by USAID that was launched in November 2018. This project was implemented by RTI International to accelerate off-grid electrification across Sub-Saharan Africa. PAOP provides technical assistance and grant funding to support the development of the off-grid solar home system (SHS) and mini-grid sectors (PAOP,2020). PAOP employs a multifaceted strategy to cultivate an off-grid market led by private enterprise through:

1. Building a Strong Foundation: PAOP focuses on critical areas like policy and regulation, market intelligence, and access to finance. This ensures a supportive environment for off-grid solutions to flourish.
2. Empowering Governments: The project actively assists governments in designing and implementing policy frameworks that encourage private sector investment in off-grid energy solutions.
3. Making Solar Power Affordable: PAOP recognizes a critical barrier to solar energy access: the initial financial hurdle. PAOP champions the Pay-As-You-Go (PAYGO) model by creating affordable access, gradual ownership, and powering everyday needs. It breaks down the cost of solar home systems into smaller, manageable ones (PAOP, 2020). This makes clean energy a realistic option for a broader population, empowering them to escape the limitations of unreliable or expensive traditional energy sources. It creates gradual ownership where users gain a stake in their solar system with each payment and become complete owners, unlocking the long-term benefits of clean, reliable energy. PAYGO systems provide enough electricity to meet basic needs, illuminating homes with bright lights and powering essential appliances like phones, radios, and televisions.
4. Financial Powerhouse: PAOP equips organizations with the tools to secure funding. They assist with developing pitch decks, providing executive coaching, and supporting successful grant applications.
5. Unlocking New Markets: Recognizing the interconnectedness of energy with other sectors like agriculture, health, and education, PAOP fosters collaboration (PAOP). This allows off-grid companies to tap into new markets and develop innovative product lines that cater to these sectors.
6. Energy for Businesses: PAOP works with USAID missions to identify and capitalize on opportunities for integrating productive energy uses into businesses. This approach empowers businesses to thrive while contributing to a more sustainable future.

Productive use of energy and Impact of Off-grid Energy in Kenya

In Sub-Saharan Africa, off-grid energy solutions are pivotal in unlocking economic prosperity and energy access, with Kenya serving as a shining example. There are several productive use applications for off-grid energy, especially in the agriculture sector such as solar water pumps, which also have numerous socioeconomic impacts.

This shift towards off-grid electrification is crucial for extending the reach of electricity to remote, rural communities, fostering resilience in the face of economic challenges. Studies by Wagner et al.(2021) reveal a compelling impact: 36% of rural Kenyan consumers using off-grid electricity have seen a 35 USD increase in their monthly income – a significant boost that surpasses half the average monthly GDP per capita.

Beyond income generation, off-grid energy empowers households by reducing energy expenditure. Solibrium, a Kenyan partner of My Climate, tackles energy poverty in rural communities by offering affordable, modular solar kits (Solibrium,2020). This initiative empowers residents to switch from costly and polluting kerosene lamps to clean energy solutions. The benefits are two-fold: significant cost savings for households and a positive environmental impact. Each solar kit displaces an estimated 400 kg of CO2 emissions annually, contributing to UN Sustainable Development Goal 12: Climate Action (Solibrium,2020). Solibrium’s impact extends beyond clean energy access. The project fosters economic development by creating jobs. With 15 full-time and 100 part-time sales representatives, Solibrium provides much-needed income security for families and individuals.

The impact of off-grid extends to education. Schools with off-grid electricity provide students access to quality education, internet connectivity, and vital science equipment. GOGLA’s 2018 report on the economic impact of off-grid solar highlights that 84% of households with children have access to solar power systems, increasing study time (Wagner et al., 2021).

Healthcare services also flourish with improved electricity access. Health centers can effectively utilize diagnostic and medical equipment, while rural communities gain the ability to store temperature-sensitive medicines, such as those for diabetes. Solar power has improved patient outcomes and helped save lives at rural Kenya clinics (Energy 4 Impact).

This energy revolution is not limited to households and schools. Off-grid solutions empower small and medium businesses. Internet cafes, mobile phone charging stations, and the integration of energy-based technologies like cold storage in restaurants – all flourish with reliable electricity. This translates to increased productivity and economic growth for these businesses.

Figure 4: impact of off-grid energy for cold storage. Source: CaaS Project Website.

Future

Kenya stands at a crossroads. Universal electrification and sustainable development are within reach but achieving this ambitious vision hinges on embracing off-grid energy solutions. Clean energy is the key to unlocking Kenya’s potential. It accelerates progress towards Vision 2030 and fulfills its commitment to reducing greenhouse gas emissions under the Paris Agreement.

Success requires a united front. Collaboration is paramount among financial institutions, policymakers, regulators, development partners, and the private sector. By working together, they can unlock the potential of mini-grid projects and standalone solar systems, ensuring clean and reliable energy becomes a reality for all Kenyans.

References

Energy 4 Impact. Impact of off-grid energy on patients in rural areas. https://energy4impact.org/news/solar-power-improves-patient-outcomes-and-helps-save-lives-rural-kenyan-health-clinics

EPRA (2023). file:///C:/Users/HP/Downloads/Energy-and-Petroleum-Stats-Report-2023%20(1).pdf

IRENA. 2023. SDG7 Tracking Progress https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Jun/Tracking_SDG7_energy_progress_2023.pdf?rev=f937758f92a74ab7ac48ff5e8842780a

KOSAP (2024). Standalone Solar Systems for Households – Results-Based Financing (RBF) Facility. https://www.kosap-fm.or.ke/standalone-solar-systems-for-households-results-based-financing-rbf-facility/

Lighting Global (2024). A Thriving Off-Grid Market – With a New Focus on Underserved Areas. https://www.lightingglobal.org/country/kenya/

PAOP (2020). OFF-GRID MARKET ASSESSMENT FOR KENYA.  https://2017-2020.usaid.gov/sites/default/files/documents/1860/Kenya-PAOP-Fact-Sheet.pdf

REREC. Rural Electrification & Renewable Energy Corporation. https://www.rerec.co.ke/about-us.php

Solibrium (2020). Bringing affordable solar projects to rural communities. https://www.myclimate.org/en/get-active/climate-protection-projects/detail-climate-protection-projects/kenya-solar-7923/

State Department of Energy (2030). The Kenya off-grid solar access project. https://www.energy.go.ke/renewable-energy-projects

USAID. Close Up: Expanding Investment in Off-Grid Energy Access in Kenya.

Wagner, N., Rieger, M., Bedi, A. S., Vermeulen, J., & Demena, B. A. (2021). The impact of off-grid solar home systems in Kenya on energy consumption and expenditures. Energy Economics, 99, 105314.  https://doi.org/10.1016/j.eneco.2021.105314

About the Author:

Purity Wambua is a dedicated Energy Engineer with two years of hands-on experience in the solar industry, specializing in installations, design, and operations and maintenance. She holds a bachelor’s degree in Energy Engineering from Kenyatta University, where she developed a strong foundation in sustainable energy solutions. Currently, Purity is pursuing a Master of Business Administration with a concentration in Strategic Management, further enhancing her ability to navigate and lead in the dynamic energy sector. Purity’s professional journey is marked by her passion for advancing clean energy solutions, evidenced by her active involvement in research focused on sustainable energy practices. Her interests extend to the realms of e-mobility, carbon credits, and advocacy, where she aims to drive impactful change and promote environmental sustainability. Purity’s blend of technical expertise and strategic acumen positions her as a forward-thinking professional committed to contributing to the global transition toward renewable energy. She is adept at leveraging her skills to foster innovative solutions and championing initiatives that support the reduction of carbon footprints and the adoption of clean energy technologies.

Connect with Purity on LinkedIn.

Related