Project Development Programme East Africa
Target Market Analysis
Kenya’s Solar Energy Market
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Target Market Analysis
Kenya’s Solar Energy Market
Authors
Integrated Energy Solutions (IES):
Mark Hankins
Anjali Saini
Paul Kirai
November 2009
Editor
Gesellschaft für technische
Zusammenarbeit (GTZ) GmbH
On behalf of
German Federal Ministry
Of Economics and Technology (BMWi)
Contact
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Regine Dietz
Daniel Busche
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Email: pep-ostafrika@gtz.de
Web: www.gtz.de/projektentwicklungsprogramm
Web: www.exportinitiative.bmwi.de
This Target Market Analysis is part of the Project Development Programme (PDP) East Africa. PDP East Africa is implemented
by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) on behalf of the German Federal Ministry of Economics
and Technology (BMWi) under the Export Initiative Renewable Energies. More information about the PDP and about renewable
energy markets in East Africa: www.gtz.de/projektentwicklungsprogramm
This publication, including all its parts, is protected by copyright. Any use that is not expressly permitted under copyright legislation requires the
prior consent of the GTZ.
All content was created with the utmost care and in good faith. The GTZ assumes no responsibility for the accuracy, timeliness, completeness or
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Target Market Analysis: Kenya’s Solar Energy Market
IV
Contents
1
STATUS QUO OF THE SOLAR ENERGY SECTOR .................................................... 1
1.1
BRIEF SOLAR SECTOR OVERVIEW ............................................................................ 1
1.2
MAJOR MARKET SEGMENTS ..................................................................................... 1
1.2.1 Solar PV............................................................................................................. 1
1.2.2 Solar Water Heating (SWH) ............................................................................... 4
1.3
LOCAL CAPACITIES ................................................................................................... 5
1.3.1 Solar PV Human Capacity.................................................................................. 5
1.3.2 Solar Water Heating Capacity ............................................................................ 6
2
2. MARKET POTENTIALS ............................................................................................ 6
2.1
OVERALL SECTOR OUTLOOK ..................................................................................... 6
2.1.1 2.1.1 PV ............................................................................................................. 6
2.1.2 SWH .................................................................................................................. 9
2.2
UNDEVELOPED MARKET OPPORTUNITIES ..................................................................10
2.2.1 Solar Hybrid PV & Tourism ...............................................................................10
2.2.2 Solar PV Hybrid Systems & Telecommunications .............................................11
2.2.3 Solar PV Hybrid Systems & Village Mini-grids ...................................................12
2.2.4 Solar PV Grid Connect ......................................................................................13
3
SOLAR-SPECIFIC REGULATION AND FRAMEWORK ..............................................13
3.1
POLICIES AND REGULATIONS ...................................................................................13
3.1.1 Government Institutions for Solar Energy in Kenya ...........................................14
3.1.2 Off-grid Solar PV ...............................................................................................15
3.1.3 Solar PV grid connect .......................................................................................16
3.1.4 Solar water heaters ...........................................................................................16
3.2
APPLICABLE PUBLIC SECTOR SUPPORT AND OTHER SOURCES ....................................17
4
BUSINESS PARTNERS AND COMPETITORS ...........................................................18
4.1
OVERVIEW OF KEY SOLAR MARKET PLAYERS ............................................................18
4.2 OVERVIEW MAJOR AND/OR MOST EMBLEMATIC SOLAR PROJECTS .....................................22
Target Market Analysis: Kenya’s Solar Energy Market
V
List of Tables
Table 1: Main market segments of the solar PV market in Kenya ...................................................2
Table 2:Sales of solar water heaters and market structure in Kenya ..............................................4
Table 3: Comparative Electricity Cost and Availability .....................................................................6
Table 4: Modelling Kenya’s PV Potential .........................................................................................7
Table 5: Market Opportunities in Solar Hybrid PV & Tourism ........................................................10
Table 6: Market Opportunities in Solar PV Hybrid Systems & Telecommunications .....................11
Table 7: Market Opportunities in Solar PV Hybrid Systems & Village Mini-grids...........................12
Table 8: Market Opportunities in Solar PV Grid Connect ...............................................................13
Table 9: Importing Companies in Kenya ........................................................................................18
Table 10: Consultants, NGOs and Government Projects ..............................................................20
Table 11: Government and Public Sector Projects ........................................................................21
Currency
Kenya Shilling (KES) Exchange Rates June 2009
78.8 KES = 1 USD
108.8 KES = 1 EUR
Target Market Analysis: Kenya’s Solar Energy Market
List of Acronyms
a-Si
amorphous silicon
BOS
Balance of Systems (non PV components of systems)
BBS
Battery Based Systems
ERC
Electricity Regulatory Commission
GEF
Global Environment Facility
HH
Household
ICT
Information Communication Technology
IFC/PVMTI
International Finance Corporation PV Market Transformation Initiative Project
KBS
Kenya Bureau of Statistics
KES
Kenya Shilling
KPLC
Kenya Power and Lighting Co
kWp
Peak kilowatt
MWp
Peak megawatt (solar PV unit)
NGO
Non-Government Organisation
SHS
Solar home system
PPA
Power Purchase Agreement
PV
Photovoltaic
REA
Rural Electrification Agency
SWH
Solar Water Heater
UNDP
UN Development Program
x-Si
Crystalline silicon
VI
Target Market Analysis: Kenya’s Solar Energy Market
VII
Summary
Kenya boasts a solar market that is one of the most mature and well-established in Africa. At over 1.2
MW in sales per year, the PV market offers opportunities in solar home systems, institutional systems
and Government procurement. Growth has been constant at over 10 % per year over the past ten
years, and the potential off-grid market is estimated to be over 40 MW.
Emerging opportunities in off-grid PV include the telecom industry and the tourism sector. The
anticipation is for policy to be introduced soon by the Government (through the Ministry of Energy) and
Energy Regulatory Commission to enable net metering of on-grid PV. High electricity prices,
combined with new policy and legislation are believed to boost the emerging solar water heater
industry. Rural electrification programs continue and will increasingly include solar electric power
through the Rural Electrification Authority.
The MoE provides little current policy incentives and targets or allocations for solar energy, however,
electricity shortages, fuel prices and consumer demand is focusing attention on this matter. In June
2009, the Task Force on Accelerated Green Energy Development was created by Prime Minister
Odinga, from which the first report is timetabled for December 2009. The Green Energy Fund has
recently been announced as not supporting solar power as a means of meeting its target of 2000MW
from clean energy. In combination with any new policy and financing mechanisms to assist solar
power, improvement will be needed of standards, their enforcement and a better procurement and
specification process.
There are no formal solar energy training programs within Kenya, instead skills are taught through
project-specific training and within solar companies. These include established importers, sales
agents and niche players offering pure solar products or integrated with other renewable and
battery/pump products.
Target Market Analysis: Kenya’s Solar Energy Market
1/24
1 Status Quo of the Solar Energy Sector
1.1
Brief Solar Sector Overview
Kenya is endowed with ample solar energy resources, with annual averages well over 5 kWh/m2/day
available throughout the country. In the north of the country and along the Lake Victoria basin, solar
energy resources are generally higher and more consistent. In the populated areas near Nairobi, Mt
Kenya and the Aberdares, solar irradiation is considerably reduced during the cloudy season between
May and August (<3.5 kWh/m2/day).
Total installed capacity of solar electricity is likely to be over 8-10 megawatts based on 15 years of
sales over 500 kWp/year. In 2008, key players estimate that the total market was in the region of 12
1.3 MWp. Annual solar water heater sales are of the order of 5000 x 2 m units.
By African standards, Kenya’s market is well-developed, though largely based on over-the-counter
sales of PV components and solar heating systems (SHS). Niches for institutional systems, battery
back-ups, pumping, tourism and telecom have developed rapidly and are helping to drive the
sophistication of the market forward. The solar water heater sector may grow faster than the PV
sector in the near future because of rising prices for electricity and petroleum fuels as well as policy
changes.
There are 15-20 major suppliers of solar equipment in Kenya and three manufacturers of SLI-type
lead acid batteries. In general there is a good availability of PV modules, batteries, inverters, charge
regulators and appliances. The value chain has reached into rural areas where there is a relatively
strong foundation of experienced (if uncertified) basic level installers. The quality of the equipment
remains an issue because the low end of the market is extremely cost conscious and competitive.
1.2
1.2.1
Major Market Segments
Solar Photovoltaic (PV)
Kenya has one of the most dynamic commercial PV markets in Africa with a non-subsidized demand
of 1-1.3 MWp per year that has been growing at an annual rate of 15% since the mid 90’s. Fuelled by
consumer demand from a relatively prosperous non-electrified rural population, support from
NGO/missions, and growing Government interest, a strong consumer chain has developed that is
effective in supplying and installing solar home systems and institutional systems throughout the
populated areas of the country. The capacity of the market to install and sell is mostly limited to
systems below 1.5 kW in the categories outlined. Demand for small 12 Wp a-Si modules, which
comprised the largest portion of module sales between 1998-2003, have reduced considerably and
have been replaced by small x-Si modules from the Far East. Table 1 below breaks down the main
1
market segments of the existing Kenya solar PV markets :
1
Estimate from survey of 5 major suppliers. Detailed survey was not possible within time constraints.
Target Market Analysis: Kenya’s Solar Energy Market
2/24
Table 1: Main market segments of the solar PV market in Kenya
Solar PV Technology
Off-grid HH electrification
& small scale commercial
Off-grid community
systems (including
institutional and pumping
systems)
Telecom
Tourism
Estimated
installed
capacity
>6-8 MWp
Estimated capacity
installed/ year
(2008)
>700 kW
Estimated financial
2
volume
(€/Year/2008)
>€5M
Degree of Competition
>1.5 MWp
>250 kW
>€2.5M
Extremely competitive.
Many players
Dominated by
wholesaler/agent
partnerships
>100 kWp
>50 kWp
100 kWp
N/A
N/A
N/A
Emergent – few players
Emergent
Off-grid household and small scale business electrification
Off-grid household electrification in Kenya began in the late 1980’s following the coverage of the most
densely populated rural areas (especially the Mt Kenya region) with television signals. During the
“boom period” of coffee and tea in the early to mid 1990’s, small-scale farmers who could not access
the electric grid began to buy 12-volt televisions, radios and lighting systems, and this fuelled strong
demand for solar electric systems. Today this portion of the market is highly competitive and mature,
though it does suffer from sub-standard quality issues in installation and components.
The successful development of the household and small commercial system markets is attributable to
the following factors:
1) Relatively high incomes among farmers (coffee, tea, horticulture), rural teachers, civil servants
and businesses with a strong demand for consumer electronics (TV’s, radios, cell phones)
2) Availability of PV modules (in sizes ranging from 12 to 150 Wp) and Balance of Systems
3
(BOS) . Trade in 12-14 Wp a-Si modules took up over a third of the module demand between
1998 and 2003 but has since waned with the availability of competitively priced small
crystalline modules.
3) Active entrepreneur class with strong connections between Nairobi and rural areas
4) Local battery manufacturing (there are 3 battery manufacturers in Nairobi) and large-scale use
of SLI-batteries for rural electrification
Rural demand for solar PV systems follows household demand for lead acid batteries, which has
penetrated 15-20 % of the rural and peripheral urban market. Thousands of town-based small-scale
grid based entrepreneurs in rural towns charge batteries for the rural population (at €0.30-0.60/charge)
in a business worth tens of millions of dollars per year. The battery manufacturers in Nairobi all offer
unconditional 1 year warranties on their modified SLI batteries, meaning that the purchase of such
batteries provides reasonable access to 100-200 Wh of DC electricity per day over a full year.
Demand for PV systems is largely “component”-based, meaning that sellers tend to sell system pieces
rather than whole systems. Few rural people can afford to purchase a full system all at once. Surveys
of PV system owners show that many leave out charge regulators while under-sizing modules for
systems.
2
3
Total system volume including PV and BOS
Fluorescent light bulbs and units were locally assembled until about 2000 when competition from the far east
forced local assemblers out of business
Target Market Analysis: Kenya’s Solar Energy Market
3/24
A significant percentage of small PV systems are used for small-scale commercial uses. These
include cell phone charging, barber shop, lighting of bars and kiosks and powering of music systems
to attract customers or for rural functions (church services, weddings, discos, etc.).
Off-Grid Community/Institutional Systems
Kenya has many active NGOs and missions that provide services in the remote off-grid parts of the
country (Turkana, Marsabit, etc). These groups set up infrastructure that provides a demand for PV
power systems for the following uses:
Catholic church orders set up missions in remote areas that provide church, school, health
and water facilities that often utilize solar PV for their electricity demands.
NGO office power, laboratory and clinic equipment, school lighting and community water
pumping.
Exports to Sudan and Somalia. Many of the off-grid PV systems for Somalia and Sudan are
sourced from Kenya and small Kenyan companies are used to provide installation services.
Since 2005, the Government Rural Electrification Program has installed PV systems in over 150
schools in remote off-grid parts of the country. The total capacity of installations between 2005 and
2009 is approximately 450 kW, with work completed by two companies (procurements totalled over
Kshs 338M). The Government procurement program is said to be extended and may offer additional
opportunities for interested companies. The Government policy set solar PV targets for sparsely
populated, remote areas in the north and eastern regions of the country. A recent Rural Electrification
Master Plan study identified ample opportunities in solar-assisted mini-grids, and the Government may
support this type of procurements in the future.
Tourism and Telecom
Off-grid tourism and telecom is an emerging market field (see Section 2). The sectors have been slow
in making use of solar PV systems because of
The low traditional prices for fuel
Historically off-grid tourism facilities power their entire site with diesel generators
The lack of easy finance for solar energy systems
A lack of sophisticated and tailored solutions from PV equipment suppliers
A lack of technical capacity in the sector to supply quality services.
Predominant operator models
Kenya’s PV market is mature with a distribution network that essentially is supported by the retail
network that supplies televisions and electronic goods. Linkages between international sellers, local
wholesalers and retailers and installers are firmly established, and many larger importers provide
support to their retailers, however there remains some inconsistency in models imported. The key
players are:
5-8 established importers represent international PV companies and sell their products to
their selected distributors around the country. For example, a local battery company that
manufactures and supplies most of the batteries used in household systems.
A number of opportunistic importers import PV modules as and when they can afford from
changing suppliers and distribute them to retailers of electric goods.
Hundreds of sales agent companies (often one or two personnel) represent major solar
companies and sell to geographic and niche markets that they develop on behalf of the
wholesaler. Many of these sales agents are ex-employees of the larger PV companies
Target Market Analysis: Kenya’s Solar Energy Market
4/24
High-end niche companies operate in NGO, UN and increasingly tourism and
telecommunication markets. Some of these players specialize in installing systems for NGO
clients in remote parts of Sudan, Northern Kenya or Somalia.
Others work for
telecommunication companies.
Technicians play a less prominent but key role in the market, as they rely on suppliers and
retailers to offer them jobs. Some skilled technicians operate as re-sellers and as sales
agents in developed niches.
In Kenya there is a strong distinction between importers and retailers. Retailers include shops (which
range from hardware dealers to electronics goods shops to supermarkets), franchised agents and
skilled designer/installers, all of which operate in niche markets. Few players survive 100% on sales
of solar electric systems as the business, especially for solar water heating systems, fluctuates
seasonally.
1.2.2
Solar Water Heating (SWH)
Solar water heaters have a well-established market in Kenya and have been sold in the country for
2
twenty years. In 2008, between 8,000 and 10,000 m were installed. With constantly increasing
electricity prices and planned changes in Government policy, the market for solar water heaters is
likely to significantly increase in the next 5 years. Estimates vary widely on the existing installed
capacity of solar water heaters, as many of the units installed in the 1990’s are no longer working.
Table 2 outlines the sales of solar water heater and the market structure:
Table 2: Sales of solar water heaters and market structure in Kenya
Solar Water Heater Technology
Estimated installed
2
capacity (M )
Urban Households
Tourism and Institution
N/A
Estimated
installed/year (2008)
2
(M )
4000-5000
4000-5000
Estimated financial
4
volume
(€/Year/2008)
€4.5M
€4.5M
Technologies used for solar water heaters include direct and indirect flat plate units, as well as
vacuum tube collectors. Although local manufacturing and assembly of flat plate thermosyphon-type
5
collectors was common in the 1990’s, virtually all collectors are imported today . The main exporting
nations of units to Kenya are Greece, Australia, Turkey, Israel, and China. A few companies
manufacture their own water tanks.
Since Kenya’s electricity prices doubled during 2008 (due to a shortage of hydro power and spiking
fuel bills for diesel turbines) solar water heaters have become much more attractive to consumers and
demand has increased remarkably. However, it is difficult to predict how fast demand will grow
because a) prices of electricity are extremely variable, b) the prevailing recession has hit the Kenya
middle class and tourism market hard and c) Government programs are hard to predict in the current
climate.
4
5
Total system volume including PV and BOS
Quality of locally manufactured solar water heaters is extremely variable and back up service is also poor. Local
units cannot compete on a price basis with internationally manufactured units.
Target Market Analysis: Kenya’s Solar Energy Market
5/24
Predominant operator models
In the past, a significant portion of solar water heaters were locally manufactured and this resulted in
mixed quality and a poor reputation for the technology. Today, 4-6 companies import SWH in
container loads and distribute them to customers. There are two predominant operator models:
Wholesalers import SWH and provide them to individual agents (quite commonly plumbers or
contractors)
Wholesalers deal directly with clients for projects (housing estates, hotels and lodges).
1.3
1.3.1
Local capacities
Solar PV Human Capacity
Outside of the solar companies themselves, Kenya has no organised solar energy training programs
for artisans or engineers. It does have some University-level courses in alternative energy, but these
are fairly basic and do not prepare “solar engineers” per se.
There have been a number of courses offered as part of international agency funded projects (such as
6
IFC PVMTI ) and donor/NGO-supported initiatives. An example of the latter is from the 1990s when
several NGOs offered regular training courses for PV artisans. Courses similar to these, primarily
targeted at the SHS market, have been offered around the country. Thus, there is a base of capacity
in Kenya for the installation of SHS, institutional systems, inverter-battery back-up and pumping
systems even though most installers do not have formal training.
There is a lack of capacity for design and installation of large complex systems in the industry as a
whole. Thus, when it comes to design and specification of systems above 1 kWp there is a lack of
significant engineering capacity at all levels. This lack of capacity has limited the PV industry to the
supply of small systems and prevented “upward” expansion of the market to more complex systems.
In general, large companies do not handle installation of small systems. They hand these over to
agents or specialist installers (who often market systems on their behalf) or systems are simply selfinstalled (>30%). When there is a need to install or design large systems (i.e. >2kW) companies often
call upon the international supply companies to bring in expertise.
For the size of the market, there is a sufficient pool (>50) of experienced solar technicians in Kenya
who can handle the installation of pumps, institutional systems, inverter back-ups and other “medium”
sized systems. General solar technicians that serve the smaller SHS market usually do not have
formal PV training or accreditation --- most training is on-the-job or under the supervision of
experienced solar installers. A 2003 study of 300 solar technicians that had installed more than 5
systems found that less than 5% had received any formal solar PV training at all.
Many sales engineers offering systems to consumers do not have sufficient training in design of
systems --- their poor engineering of systems contributes to the view that solar PV is a “second class”
technology.
Through the IFC PVMTI project, and other similar efforts, training programs have been developed, but
these courses are short term, irregular, and they do not have recognized accreditation. Several
6
International Finance Corporation’s PV Market Transformation Initiative Project: 1998 – 2007, a GEF project of
$5 million that targeted the development of the PV market through loans to consumers and PV companies. The
Kenya portion of the project has widely been regarded as unsuccessful.
Target Market Analysis: Kenya’s Solar Energy Market
6/24
consulting firms and polytechnics have basic capacity to train technicians, but there is a need to build
7
this . Training courses for solar technicians in the absence of practical installation activity often do not
result in significant improvement of skills levels because 1) technicians rapidly loose the skills imparted
and 2) there is no means for technicians to be practically evaluated after finishing courses.
1.3.2
Solar Water Heating Capacity
The human capacity for solar water heating is largely a similar situation to PV. However, because of
the smaller market activity in solar water heaters, the pool of available plumber/technicians is smaller.
As well, problems with water quality and supply compound installation issues and increase the
complexity of solar water installation. Virtually all installations of solar water heating are single-unit
thermo-siphon type. Only a handful of institutional large-scale solar water heater systems with
centralized storage, pumped circulation and thermostat regulation have been completed.
Most training for SWH installations is done in-house at companies. Similarly to PV companies, SWH
companies suffer from a fairly rapid turnover of staff and a migration of staff into the independent
market, resulting in a relatively low capacity of some companies to deliver consistent quality.
2 Market potentials
2.1
2.1.1
Overall sector outlook
Photovoltaic (PV)
PV market potentials are largely based on the cost and availability of electricity. In Kenya, this can be
divided broadly into on-grid areas and off-grid areas. The table below summarizes the cost and
availability of electricity in on and off-grid areas and among several economic sectors:
Table 3: Comparative Electricity Cost and Availability
Sector
Grid-Proximate
Middle Class
Consumer
Electricity Costs
8
KPLC rates US$0.15-0.25/kWh
Grid-Proximate Low
Income Consumer
KPLC rates US$0.10-0.25/kWh
Recharged Battery: >$0.50/kWh
Dry Cell: >$10.00/kWh
Kerosene: ±0.25/lighting point hr
KPLC rates US$0.15-0.25/kWh
Grid Proximate
Commercial
Off-grid Middle
Class
7
8
Generator: >US$0.30/kWh
Recharged Battery: >$0.50/kWh
Dry Cell: >$10.00/kWh
Kerosene: ±0.25/lighting point hr
Electricity Availability
Most middle-income urban consumers are grid
connected. They often buy back-up battery-inverter
systems or generators to overcome frequent electricity
shortages
Less than 50% of low income urban HH are connected
to the grid. They use car batteries, dry cells and
kerosene for HH lighting and electricity.
Most urban businesses are grid connected. They often
buy back-up battery-inverter systems or generators to
overcome frequent electricity shortages
Less than 1% of rural HH are connected to the grid.
They use generators car batteries, dry cells and
kerosene for HH lighting and electricity. Use of
electricity & fuels varies greatly with income.
ESD/CAMCO,
Electricity prices are approximate and based on figures from Kenya Power and Lighting Co. Figures fluctuate
greatly, in line with changes in international fuel prices. Electricity bills are composed of connection charges,
kWh charges, variable fuel cost charges and other levies. Power rates can be downloaded at <
http://www.kplc.co.ke>.
Target Market Analysis: Kenya’s Solar Energy Market
Off-Grid Low
Income
Off-Grid
Commercial
Recharged Battery: >$0.50/kWh
Dry Cell: >$10.00/kWh
Kerosene: ±0.25/lighting point hr
Generator: >US$0.30/kWh.
Costs are often much greater in
remote areas.
7/24
Off-grid rural poor use car batteries, dry cells and
kerosene for HH lighting and electricity. Use of
electricity & fuels varies greatly with income.
Off-grid businesses utilise generators for many
activities. The flexibility of generators is seen as an
advantage over PV in many locations.
Market Potentials
The market potential for PV is excellent in Kenya for a number of reasons that echo across East
Africa:
1. PV sales have been growing at a sustained rate of over 10% per year for the last 10 years.
Although the 2008 political disturbances and economic downturn have slowed investment and
buying power somewhat, the general trend for the solar market is still positive.
2. Off-grid, the costs of running generators increased rapidly in 2008. Geographically speaking,
70% of the country is far from the grid, and this means that commercial, NGO and households
that had previously relied on generator power are reconsidering use of generators and switching
to hybrid solar.
3. On-grid, it is just a matter of time before the Government and regulator will accept net-metering of
PV. Electricity demand in Kenya is outstripping supply, and there are many up-market grid-based
customers that already have inverter-battery systems to weather power failures. Many of these
9
customers would be willing to install PV if net-metering was in place .
4. Planned Government and World Bank-coordinated rural electrification programs will increasingly
include solar electric power, particularly through the newly-established Rural Electrification
Agency.
The table below presents an indicative matrix of the potential for PV systems in Kenya. These
categories are discussed in greater detail in the following sections.
Table 4: Modelling Kenya’s PV Potential
PV Category
Basic Potential Market
Size
Existing Penetration
Solar home systems
Off-grid Schools
Clinics
NGO power
Isolated grids and rural mini-grids (RE)
Small-scale commercials
Telecom
Tourism
>30 MW
>2 MW
N/A
N/A
>3 MW
0.5 MW
>3 MW
>2.5 MW
6-8 MW
>500 kWp
N/A
>1.5 MW
0
N/A
<150kWp
Negligible, NA
Obstacles / constraints
Obstacles and constraints in “developed” markets are discussed in this section. Unique problems with
undeveloped market portions are discussed in Section 2.2.
9
Informal survey work with major PV companies and customers has established that there are scores of potential
grid connect PV systems in existence and, most probably, hundreds of installations (ranging from 1-100 kWp)
that would occur given a legal approval of the practice. See Section 3 for more information.
Target Market Analysis: Kenya’s Solar Energy Market
8/24
Commercial Small System SHS Market
Limited short term consumer spending power since a large portion of this demand is over-thecounter and based on consumer desire to power televisions, music systems, cell phones and
lights. Expenditures typically range between $50 and $200. Many consumers buy solar
equipment to match existing BBS and do not plan or prepare for SHS. Despite many efforts to
finance PV, there are only a handful of successful PV finance programs.
Quality is a major issue within the SHS market. There are problems with equipment standards
10
and installation practice . Companies that seek to participate in the market will be forced to
deal with both of these issues.
SHS competes unfairly with grid electrification. The Government electrification strategy views
solar PV as a second-class technology to be used in remote areas only and does not have a
policy for “grid-proximity” PV systems even though most of Kenya’s estimated 300,000 SHS
are within 2-5 km of the grid. In the Government’s view, all these customers will receive grid
connection. Given that there are over 4 million un-electrified rural households, and historically
the Government has not been able to connect more than 30-40,000 rural households per
11
year , conservative attempts to roll out electricity would take well over 50 years. Despite this,
the Government promises of grid power to rural groups impacts the consumers’ demand for
SHS solutions.
The cost of reaching and servicing large numbers of small off-grid systems is high.
Intense competition often forces down the quality in this market.
Larger System Market
In Kenya, this market is driven by personal contacts that sometimes carry more weight than
the quality of products. There is sometimes a lack of transparency in the selection process for
tenders (especially in Government procurements).
Installers often do not have enough skills to meet international standards. Drawings and
electrical diagrams are often missing. Providers of electrical spares often do not have the
equipment needed for professional systems.
Often buyers do not have clarity of what they want and consumers of large systems often
have unrealistic expectations.
System failure in the off-grid market is often the result of poorly operated, maintained and
managed systems.
10
The Kenya Bureau of Standards and participating PV companies recognizes east African standards. However,
the lack of consumer awareness, proper incentives or enforcement practice means that the standards are
largely meaningless. Since virtually all SHS installations are private sector and consumer driven, there is not
an incentive to encourage consumers to follow standards.
11
The REA, with World Bank support, plans to greatly expand this! See Annual Report KPLC, 2007/08 available
at http://www.kplc.co.ke.
Target Market Analysis: Kenya’s Solar Energy Market
9/24
Recommendations for German RE enterprises
Commercial SHS Market
Clustering of large numbers of systems may provide an interesting approach to reaching a large
number of customers. This may be done by contacting associations of cash crop or salaried workers
(i.e. tea, coffee, civil service and teachers) and offering them wholesale prices on systems with
warranties.
Partner with suppliers who have a reach into the market
When targeting the SHS market, have as flexible as possible a product offering and let local dealers
assemble components.
Remember that entertainment and communication (i.e. TV, music and cell phones) are more
expensive and important than lighting services to most rural people
Offer packages that can build on batteries since many customers already have a battery.
Work with Government to install demo-projects in grid-proximate areas.
Participate in dialogue with consumer groups, Government policy agencies, the World Bank, Rural
Electrification Agencies, and PV companies to expand the roll of PV in rural electrification.
Larger System Market
The larger system market is quite distinct from small system market and requires a different market
approach. To enter this market, contacts with donors, aid organizations, missions and Government
procurement agencies are useful.
Ensure that systems are appropriately designed and installed well.
It may be useful to approach this market through groups that have not traditionally been connected to
the PV market but have good contacts in the desired markets (i.e. providers of pumping technology,
contractors, engineering groups, etc.).
Use Kenya as a staging point for the installation of large systems in neighbouring countries (especially Sudan,
Somalia, Uganda, Rwanda, Burundi, etc).
2.1.2
Solar Water Heating (SWH)
As mentioned previously, the outlook for growth in the solar water heater sector is excellent, both in
terms of the household and commercial units.
Conservatively assuming that 10% of the approximately 1,000,000 domestic and small commercial
KPLC consumers have geysers, there is a potential market for 100,000 solar water heaters in the
country among small consumers. As well, there is a large potential market both on and off-grid in the
hotel industry (±6000 SWH, assuming one geyser per two beds).
Current Government electricity policy discussions view solar water heaters as a positive method of
reducing peak load. It is expected that policy initiatives supporting solar water heaters will be put in
place in the medium term (see Section 3).
Target Market Analysis: Kenya’s Solar Energy Market
2.2
10/24
Undeveloped market opportunities
All areas of opportunity are outlined and summarised in the following tables.
2.2.1
Solar Hybrid PV & Tourism
In 2007, Kenya had about 840,000 international visitors to parks and game reserves (and almost
700,000 local visitors). There are several hundred licensed tourism accommodation facilities in the
country, 200-300 of which are off-grid. The most likely segments of interest to German renewable
energy companies are the hotel and lodge groups servicing the mainstream package tourism market
and the high end small scale exclusive camps (there are 40 of these).
Tourism globally has experienced a downturn since the second half of 2008 and current indicators
suggest that challenging conditions will continue into 2010. The economic downturn has translated to
tourism companies postponing planned capital investments in projects. Conversely, the downturn is a
key driver in companies seeking to reduce their energy costs, which typically are amongst the highest
operating costs of a lodge or hotel.
Virtually all off-grid tourism sites in Kenya rely on generators for electrical requirements (lighting,
12
pumping, refrigeration, communication, etc) . Rising prices for fuel, theft, and a “greening” of
expectations among tourists is driving off-grid facilities to reduce dependence on generator power.
Some tented camps have installed hybrid solar PV systems, and other lodges are installing inverterbattery back-up systems so that they run equipment when generators are off.
Tourism companies are generally aware of solar energy and interested in pursuing it as en energy
solution (especially for water heating), but specific awareness of the right technology and their
appropriateness to particular applications is low. Tourism companies use the top 3 suppliers (Davis
Shirtliff; Chloride Exide; Wilken) based upon relationships built over the last decade or so. They are
extremely risk averse in investment strategies with new technologies and this approach has been
greatly exacerbated by high numbers of unreliable and questionable companies that approach them.
Table 5: Market Opportunities in Solar Hybrid PV & Tourism
Applied
technology
Size of
Opportunity
Competitiveness
Solar PV stand alone power for small tented camps
Hybrid solar generator systems for mid-sized camps and lodges
Solar water heaters for all camps and lodges
Solar electric fencing, telecommunications, solar pathway lighting
Solar PV stand alone & hybrid solar generator systems for camps and lodges >2.5
MW
Solar water heaters for camps and lodges
Primary competition is against generator sets that entail a lower investment cost despite
higher operation costs (±USD 0.35/kWh from operation & fuel costs).
Higher end of the market targeting higher paying customer (small and medium sized tented
camps and lodges) likely to be more discerning in their choice of technologies, favouring
quality and reliability.
Planning
12
Solar water heating will have to compete with cheaper technologies from elsewhere in
Europe, N. Africa and China.
1 + year time horizon
1-2 + year time horizon, but projects must compete with other unrelated (i.e. non
energy) investment projects
Some sites even cook and heat water with generator electricity
Target Market Analysis: Kenya’s Solar Energy Market
Constraints
Recommendations for
German
companies
2.2.2
11/24
Financing of solar water heaters --- and especially solar PV – presents difficulties
because of high capital costs.
Weak design and installation capacity of local systems integrators.
Previous poor experiences with solar technologies.
Poor maintenance and back-up capabilities
Much of existing market will require retrofit, so installation best considered during
planned hotel rehabs/refurbishment projects.
Rapid uptake for good quality solar PV and hybrid systems is possible once a “bold
mover” can demonstrate proof of concept – this is demonstrated by previous
experience with battery-back up systems (see Serena example below)
Financing solutions will be a key determinant, especially in high capital cost solar PV.
Work with trade finance organisations, export credit schemes etc to address risk
factors & offer finance solutions
Penetrate the existing market by work with larger tourism groups that have
international partners and/or presence
Market for new hotels and lodges will require marketing and engagement with design
teams (project managers, architects, consulting engineers) – currently more inclined
towards traditional forms of supplying energy
Professional systems integration, solutions offering strong technical back up &
support
Complete PV system solutions / PV hybrid solutions
Centralised SWH systems either providing complete supply or as pre-heat to boilers
Solar PV Hybrid Systems & Telecommunications
The ICT sector, especially mobile telephony, has seen phenomenal growth in Kenya since 2002.
Subscriber growth in the period June 2007 to June 2008 alone grew by 39%, an outlook that is set to
continue over the next three to five years, even with the current economic downturn.
Kenya currently has four mobile phone providers and there are approximately 8,000 base
transmission stations (BTS) in the country. Half of these are owned by the largest operator,
Safaricom. Approximately 25% of all base stations (2000) are off-grid and out of these only about 50
are powered using wind/diesel or solar/diesel hybrids and 150 utilise inverter-battery back up systems.
There is ample opportunity to work with local companies to build up solar hybrid powered power
sources, as they have lower costs and are more reliable (see Section 2.1 for conventional off-grid
13
costs of power) .
Table 6: Market Opportunities in Solar PV Hybrid Systems & Telecommunications
Opportunities
Applied
technology
Size of
Opportunity
Competitiveness
13
Base stations
Wireless communication / internet
HF / VHF
Consumer / cell phone charging
Solar / Wind and diesel hybrid systems
Battery back up systems for BTS powered by diesel gensets
Small PV systems for VSAT, phone charging and other applications
3 MWp (assuming 50% penetration of off-grid market and 2.5 kWp system on each
base station, 500 kWp additional opportunities)
Telecommunications companies operate as large multinationals so much of the procurement
and ordering decisions are made off-shore. Renewable energy systems, base station
electronics and other technology are competitively sourced with competition from China and
other countries.
Employees of telecom often steal fuel and tourism companies operating generators.
Target Market Analysis: Kenya’s Solar Energy Market
Planning
Constraints
Recommendations for
German
companies
2.2.3
12/24
1-2 year (or longer) planning periods are common for telecom base station investments
High upfront costs of solar powered systems
Fighting oil cartels within telecom companies/local Government that resist switches to
RE/solar
Overcoming poor previous experiences with solar
Matching solar equipment to telecomm equipment is often difficult as telecomm
companies change equipment frequently
Approach telecomm companies at high levels where decisions are made
It may be useful to bring finance with technology packages
Do research on the type of equipment the prospective client it using
Be prepared to offer demonstration equipment to prospective customers
Be aware of the linkages between the various regional telecomm companies as it may
help build business networks
Study other opportunities in the telecommunications sector (i.e. VSAT power, mobile
phone charging, internet cafes) as companies may be interested in a wide range of
applications
Solar PV Hybrid Systems & Village Mini-grids
The Kenya Government, through the Rural Electrification Agency and the Ministry of Energy, has set
about embarking on an aggressive Rural Electrification program that is likely use solar PV in mini-grids
and off-grid hybrid diesel generation. Although funding is not identified, there is a strong possibility for
support from the Kenya Government and the World Bank.
A recent study, carried out for the Ministry of Energy by Decon (a German consulting company),
analysed the development of remote off-grid sites and recommended approaches for meeting their
electricity needs. Currently, the primary approach is remote generator sets feeding power into minigrids and isolated solar PV systems for institutions. Over US$100M in opportunities for renewable
projects is outlined in the 2008 Rural Electrification Master Plan. See Section 3 for more information
on this study.
Table 7: Market Opportunities in Solar PV Hybrid Systems & Village Mini-grids
Opportunities
Applied technology
Size of Opportunity
Competitiveness
Constraints
Recommendations for
German companies
Village mini-grids
Large hybrid generation
Solar / Wind and diesel hybrid systems
Isolated grid connected solar power generation stations
This is a new field that will require considerable development and possibly co-financing
by international agencies.
Since this is a largely unexplored field, there is little competition or commercial activity.
High upfront costs of solar powered systems
Lack of experience in designing, financing, planning and installing PV mini-grids
Oil cartels that seek to continue trade in diesel and do not want to see reduced
fuel use
Scepticism on the part of Government agencies on solar electricity value in this
type of project.
Advocate for PV in mini-grids and provide examples and technical expertise to
help planners
Seek to work with the Kenyan Government, and multi-lateral and bilateral
agencies to build experience in developing projects
Identify opportunities for public-private partnership in implementation of PV minigrids.
If this is an area of interest, be prepared to explore piloting arrangements
Target Market Analysis: Kenya’s Solar Energy Market
2.2.4
13/24
Solar PV Grid Connect
It is predicted that consumer demand for grid-connect PV (in response to the need for demand-based
solutions for load shedding), and development of grid-connect policy by other African states (including
South Africa) will eventually lead the Kenyan Government to enact grid connect policies and it may
14
happen faster than previously expected .
Companies are exploring a variety of approaches for grid-connect PV ranging from large scale power
plants to individual house systems. For example, a large Indian-US PV generation group has met with
the Kenyan Prime Minister and discussed the potential of large grid connect projects (>50 MW). At
the same time, local Kenyan PV companies are quietly lobbying the Government to develop legal and
regulatory structures for grid connect PV for existing customers. As well, several property developers
are interested in including grid-interactive solar PV systems in housing developments (one of these
could potentially be over 500 kWp of PV). All of these players see demand for grid connect PV now
and are positioning them to take advantage of this as a significant business opportunity.
Table 8: Market Opportunities in Solar PV Grid Connect
Opportunities
Size of Opportunity
Applied technology
Competitiveness
Constraints
Recommendations for
German companies
Household
Commercial
BIPV
Solar Power Plants
Too early in pre-development stages to quantify.
Solar electric systems with inverter and battery back-up technologies
Larger power plant types of systems
For the commercial and middle class electricity customers, PV is rapidly approaching
grid parity in Kenya. Electricity costs already approach US$0.20-0.25 and spike with
fuel cost increases. Further, thousands of small businesses utilise battery back-ups
and generators to ensure power availability when the grid fails (a daily occurrence in
many locations).
High upfront costs of solar powered systems
Lack of experience in designing, planning and installing systems
Lack of Government legislation and regulations for grid connect
Lack of awareness of grid connect/grid interactive potential
Make sure local partners have technical expertise on grid technology
Assist local partners to lobby for proper policy
Keep track of legislative developments
Package market development with battery back-up products (which are in high
demand)
3 Solar-specific regulation and framework
3.1
Policies and regulations
With the exception of the removal of duties and VAT for solar energy equipment and the use of solar
PV in remote electrification activities, the Kenya Government has not developed a policy support
regime for solar energy which has specific targets or allocations. Although Government documents
mention solar energy in a “positive light” there have been few incentives, and no specific targets or
legislation designed to increase the uptake of solar energy.
However, Government policy is beginning to put in place some legislation that will help the solar
market develop in response to electricity shortages, fuel price rises and consumer demand. This
14
South Africa, Namibia and Rwanda already have pilot grid connect systems. South Africa is currently
developing grid connect legislation will be carried out.
Target Market Analysis: Kenya’s Solar Energy Market
14/24
15
includes feed-in tariffs for other renewables than solar PV , and the wider use of solar energy in rural
electrification.
3.1.1
Government Institutions for Solar Energy in Kenya
Ministry of Energy (MoE)
The Ministry of Energy is the policy-setting body of the Government on all energy matters. It is
responsible for implementing the Energy Act 2006, which sets out the National Policies and Strategies
for short to long-term energy development. The broad objective of the 2006 Energy Policy is to ensure
the provision of adequate, quality, cost-effective, affordable supply of energy while ascertaining
environmental conservation. The MoE is responsible for the development and provision of costeffective, affordable and adequate quality energy services on a sustainable basis in the short to longterm and has developed the current Feed-In Tariffs for wind, hydro, co-generation and geothermal
power.
To manage and regulate its power sector effectively, the Kenyan Government has established two
bodies to regulate energy related issues (ERC) and to promote and implement the rural electrification
of rural, non-grid-connected areas (REA).
Energy Regulatory Commission (ERC)
The Electricity Regulatory Board (ERB) was established under the Electric Power Act, 1997. On the
coming into effect of the Energy Act, 2006, ERB was re-organised as Energy Regulatory Commission
(ERC), a single sector regulatory agency with responsibility for economic and technical regulation of
both power, renewable energy and downstream petroleum sub-sectors, including tariff setting and
review, licensing, enforcement, dispute settlement and approval of power purchase and network
service contracts. Negotiation of power contracts with IPPs falls under the responsibility of the ERC.
ERC is appointing a senior management position that will be dealing with renewable energy sources.
Rural Electrification Authority (REA)
The Rural Electrification Authority (REA), established in 1973 by the Government of Kenya, manages
the Rural Electrification Programme Fund, hereby supporting the electrification of rural areas and
other areas considered economically unviable for electricity by the licensees. In their Strategic Plan
2008 – 2012, which is based on Vision 2030 and Sessional Paper No. 4 of 2004 of Energy, REA is
setting the target to raise access level to electric energy in urban areas from 63% in 2008 to 100% in
2012, and Proportion of Rural Population with Electricity from 10% (2008) through 22% (2012) and
65% (2022) to 100% in 2030.
To achieve these targets, REA has defined strategic objectives that contain, among others, the
promotion of development and use of renewable energies, with an estimated budget of more than 1.1
billion Kshs (US$ 14M) between 2008 and 2012. This is primarily targeted for off-grid PV and wind
systems.
15
Feed-in tariff schedules and programs have been developed for wind, mini & micro hydro and biomass
cogeneration. There is no PV feed-in policy or regulation.
Target Market Analysis: Kenya’s Solar Energy Market
3.1.2
15/24
Off-grid Solar PV
Taxation and Duties
In the late 1990’s, duties were removed from solar products (including modules, solar batteries,
regulators and inverters). PV modules were exempted from Value Added Tax during the 1990’s, and
this exemption has continued in recent budgets.
Standards and Quality
The Kenya Bureau of Standards has developed minimum standards and installation guidelines for
solar PV equipment and solar installations (these are largely adapted from international standards and
have been incorporated into East African standards). Systems installed for Government projects are
required to follow these. As well, equipment Imported into the country must, in theory, meet these
16
standards .
However, KBS is not legally able to enforce its standards, and it has little recourse with companies
that bring in equipment that does not meet international standards, so there have been problems with
quality control of modules and components in the market. In practice, local importers often work
together to prevent offending agents from importing sub-standard equipment.
Private installations largely occur outside of any code or standards and there is no standard procedure
for inspection of PV systems. An increase in awareness of standards might change the market status
and perception of PV as a “cheap” technology. However, any such approach would have to be lighthanded and based on pro-consumer approaches, as the Government does not have the capacity to
regulate the market and there is risk of “rent-seeking” behaviour if legislation enabled policing of substandard installations without equivalent incentives for consumers to improve their systems.
Rural Electrification
As mentioned in Section 2, rural electrification planning activities of REA recognize a role for and
provide a planning budget for solar PV in off-grid electrification in off-grid electrification strategies for
a) mini-grids and b) stand alone institutions (clinics, administration posts and schools)(see section 3.2
for details). The role of implementing off-grid solar PV systems, which has traditionally been handled
by the Ministry of Energy, is likely to be transferred to the REA.
Note that Government policy does not specify a role of solar PV for Solar Home Systems in “preelectrification” of areas proximate to the grid (where >300 kWp/year demand for SHS is located).
Unlike Tanzania or Uganda, Kenya does not provide incentives or subsidies for household solar PV
systems. This is seen as a serious flaw in policy for several reasons.
It limits PV implementation to public sector procurement in remote areas where there is little
commercial interest (when most PV business in Kenya is currently in the private sector in high
potential cash crop area).
It does not provide a role for PV in the support of grid electrification in high potential areas.
Given that there are 4 million un-electrified off-grid rural households, mostly located in high
potential farming areas, and grid-based rural electrification is only completing (at most)
100,000 connections per year, there is a large suppressed demand for electricity.
It limits participation in the rural electrification PV sector to the several selected companies
that win Government tenders. This means the scores of other companies are unable to
participate in the market.
16
See <eac-quality.net/fileadmin/.../Draft_EAS_for_16TH_EASTSC.pdf> for description of standards for PV
components. These standards will be adopted throughout East Africa and will supersede Kenya and Uganda
country standards.
Target Market Analysis: Kenya’s Solar Energy Market
3.1.3
16/24
Solar PV grid connect
The Ministry of Energy has formulated, published and is now implementing a feed-in tariffs policy for
wind, small hydro and biomass resource generated electricity (these projects must meet a minimum
size to qualify for funding). This policy is aimed at attracting private sector investments in electricity
generation from Renewable Energy Sources as a means of diversifying national power sources,
enhancing national energy security, creating employment and income generation. The tariffs which are
for power grid interconnections shall apply for fifteen (15) years.
The feed-in tariffs do not allow small power systems to feed power into to the grid. Policy makers
have yet to consider inclusion of PV grid connection clauses and solar projects (large and small) are
yet to be considered for feed-in. PV was most probably not included in these feed-in tariffs because it
is viewed by the Ministry to be too expensive, poorly matched to demand and too small in size. Small
scale solar PV does not meet expressed policy goals of rapidly scaling up power availability with low
cost electricity.
Recommendations for German RE enterprises on how best to proceed in light of the above present
themselves in the following ways.
Rapid changes in solar feed-in tariffs are occurring in various parts of Africa (South Africa,
Namibia, Uganda). It is useful for companies to establish relationships with the Government
and private sector to lobby for positive grid-connected regulations.
Some companies may want to demonstrate the value of grid connect (and net-metering) by
conducting “pilot” demonstration projects. If support was properly couched, the Kenyan
Government would likely be supportive of “business initiatives” and it is likely that there will be
a number of companies and customers who would like to execute grid connect solar projects.
3.1.4
Solar Water Heaters (SWH)
The Government views solar water heaters as a practical demand-side method to reduce consumer
electricity demand in urban areas.
Standards, Quality and Legislation
Standards have been developed for solar water heaters and are available from KBS. As with PV
standards, there is a lack of enforcement because KBS does not have the capacity to play this role.
Legislation has been drafted that will require all newly-built homes and commercial institutions to
install solar water heaters that meet Government standards. This legislation has not yet been
gazetted, but it is expected that this will become law in the next several years.
Lawmakers realise that the private sector does not have the capacity to rapidly scale up solar water
heater installations, so implementation of the policy has not yet occurred, and there is likely to be a
period of time over which enforcement of the new policy will be effected.
Target Market Analysis: Kenya’s Solar Energy Market
3.2
17/24
Applicable public sector support and other sources
The Kenya Government does not yet directly allocate support for solar energy, except remote
institutional systems for the Rural Electrification Program described below.
Task Force on Accelerated Green Energy Development
In June 2009, Prime Minister Odinga appointed the Task Force in light of the worsening situation for
energy supply and costs to industries and households, with the intention of launching a Green Energy
Development Campaign in June 2011. The campaign is due to offer attractive financing, strong fiscal
incentive and/or equity investment to eligible private sector organisations to facilitate the conversion
from conventional energy sources to alternatives including solar and replace existing power
generation facilities with “less costly and carbon free technology by large energy users”. The
objectives of the Task Force are to review and identify eligible projects, policy and means to allow
projects are completed in shortest timeframes as possible, provide financing sources and modalities
including PPP arrangements and provide encouragement for the sale of green energy generated
carbon credits. Members of the Task Force Steering Committee include the Ministers for Energy,
Industrialisation, Environment and Agriculture, the Chair of the Kenya Private Sector Alliance and the
Chair of the Association for Large Power Consumers.
The Prime Minister’s Office, in close collaboration with the Ministry of Energy, announced a “Green
Energy Fund” during the time of this market study. It was announced that the Green Energy Fund,
which targets the development of 2000 MW of clean energy, would support wind, hydro, geothermal
and “clean coal”. Solar energy was not specifically mentioned. Currently, the Fund developers are
consulting with members of the energy sector to identify potential projects.
The first quarterly report from the Task Force is timetabled for release in December 2009.
Rural Electrification Procurements
Currently, the Government is completing installation of stand-alone PV systems in a number of clinics
and schools. As mentioned previously, these activities, worth about US$ 1M/year since 2004, have
been tendered to two companies through the Ministry of Energy.
Under the 2008 Rural Electrification Master Plan report recommendations, solar electricity public
sector support fall in remote power supply through a) stand-alone power supply for clinics, schools
and Government posts and b) power supply for mini-grids as follows:
The retrofit of existing diesel engine based decentralised power stations into hybrid schemes
(wind-diesel or PV-diesel or producer gas/biogas-diesel) for an improved economic efficiency
(USD 50 million);
Pre-electrifying 4,000 isolated loads in remote hamlets will be pre-electrified with stand-alone
PV systems
Note that the 2008 Rural Electrification Master Plan document has yet to be implemented. The MoE
and REA are currently developing strategies to implement the plan (with the World Bank and others).
Interested parties should consult the Ministry of Energy and Rural Electrification Agency.
Target Market Analysis: Kenya’s Solar Energy Market
4
4.1
18/24
Business partners and competitors
Overview of key solar market players
Table 9: Importing Companies in Kenya
Importing
Company
Company Description
& Distributors
Company Strategy
Major Product
Solar/PV Business
Sector
Equipment
Sources
Contact
Person
Address
Further Contact
Details
Chloride
Exide
Kenyan Company with
subsidiaries in Tanzania
& Uganda. Owned by
battery manufacturer
(Associated Battery
Manufacturers). Largest
player in PV market.
Likely to open PV
factory with German
company.
35% of business is PV, core
business is lead acid
batteries. Sell PV in order to
push their batteries. Have 10
outlets/depots and >250
dealers all over the country.
Sell both retail and
wholesale and offer both
installation and after sales
services through their
depots.
Sell power protection and
solar-related products. 50%
of business is PV. Have 4
branches and 15 dealers.
Do both wholesale and retail
through their branches.
All PV components,
batteries. Inverter
battery back-ups,
refrigerators, pumps.
Solar water heaters.
Wind generators.
Wholesaler and
large project
implementer.
Institutional market
and small
commercial system
market.
Local batteries
from ABM.
Supplies Suntec
and BP modules,
various BOS from
Germany, China,
US. Megasun
SWH.
Guy Jack,
MD
P.O. Box 14242,
Industrial Area,
Nairobi Kenya
guy@chlorideexide.
com
Wholesaler.
Operates through
agents in Kenya,
Tanzania, and
Uganda.
Sollatek BOS,
modules from US.
Chris
Soper
Kenyan-owned PV and
remote power company.
Solar company
established in 1989.
Was market leader
2000-2005.
Have several branches. Sell
system packages and
components from Nairobi
office. Use media to sell
product. 100% PV and backup power systems.
All PV components,
batteries. Inverter
battery back-ups,
pumps. Solar water
heaters. Wind
generators.
Institutional,
telecomm.
E-solar brand.
Recent company
changes have
affected
partnerships.
Ngong Rd,
Nairobi Kenya
Kenyan-owned family
business. Several
shops in Nairobi. Oldest
PV seller in country
(since 1985).
Appliance and solar PV
company. Sell over the
counter and packed systems
mostly to the SHS market.
Have agents they distribute
through.
All PV components,
batteries. Inverter
battery back-ups,
pumps.
Institutional market
and small
commercial system
market.
Modules:
Kyocera.
Regulators: Steca.
Various BOS
P.O Box 45525,
Nairobi Kenya
Sollatek
Kenital
Telesales
Kenyan-Owned
Franchise of Sollatek
UK. Franchise in
Tanzania, agents in
Uganda and region.
Modules, lamps,
charge controllers.
Tel: +254 (0)20
532211/48/49
www.cekl.com
PO Box 34246
Sollatek Building
Mombasa/Malin
di Rd.
chris.soper@sollate
k.co.ke
Tel: +254 (41)
5486250/1/2/3
www.sollatek.co.ke
solar@kenital.com
Tel: 254 20 2715960
www.kenital.com
telesales@wananchi
.com
Tel: (020) 213143
Target Market Analysis: Kenya’s Solar Energy Market
Davis &
Shirtlif
19/24
Pumping/swimming pool
service company
expanded into solar in
2005. Established >20
years. Rapidly
growing. Operate in
Kenya, Tanzania,
Uganda, Rwanda,
Ethiopia and Zambia.
10% of their business is PV.
Focus on NGO, pumping
and wholesale to distributor.
Operate through a number
of small-scale agents that
provide customer service.
2nd largest PV player in
Kenya.
All PV components.
Inverter battery
back-ups, pumps.
Solar water heaters.
Wholesalers. NGO
Market, institutional
market, SHS.
Sangyug
Ent.
Long established solar
wholesaler. Family
business.
Modules, lamps,
BOS. Some SWH.
Wholesaler
Modules from
India & China,
Tripplite inverters,
CC- India.
Sundaya CFLs
Win
Afrique.
Specialist systems
integrator company
focused on large
projects and telecom
sector.
25% of their business is PV,
have no depots but over 100
dealers most of who are hire
purchase companies
countrywide. Do not sell
retail and do not offer
installation services.
>$1.2M/2008
Actively seeking to install
back-up and hybrid solutions
for Safaricom and other
players. Installed $1M worth
of PV in 2008
Wind & solar hybrid
systems.
Niche market in
supply of large
systems for
communication
sector
N/A
Digitel
Supplies Edwards SWH
systems to corporate (hotel)
clients.
Solar water heaters.
Institutional, tourism
Australian SWH
Supplies Solahart
(Australia). Works in
commercial hotel market
and HH market.
Solar water heaters,
some PV
Institutional, tourism
Australian SWH
Premier
Telecomm firm
established by exWilken MD. >10 years
in business.
Telecomm firm that does
some SWH and PV
business. Established >
20 years
PV wholesaler
Asachi
PV wholesaler
Bhatt
Electrical
s
PV wholesaler
Wilken
Supplies Yingli PV
modules (was
Shell/Solarworld
distributor).
Batteries-Incoe
(indonesia), CC,
DC lightsSundaya,
Norman
Chege,
Manager,
Solar
Dept.
Industrial Area,
Nairobi Kenya
solar@dayliff.com
norman@dayliff.com
Work: 254 20
558335
Mobile: 0722
781081
www.dayliff.com
Mr. Mulki
Cell:+254 720
650065
Target Market Analysis: Kenya’s Solar Energy Market
20/24
Table 10: Consultants, NGOs and Government Projects
Name
Role in
Sector
Activities
Procurements
(Types of equipment/services)
Volume
kWp or $$$
Integrated
Energy
Solutions
Consultant
Project development, off-grid
system design, energy audits,
market study
Specifying off-grid
PV systems
CAMCO
Consultant
Integral
Consulting
& Advisory
Services
Ltd
Consultant
Solarnet
Contact
Address
Email
Telephone
N/A
Anjali Saini
P O Box 41411
anjali.saini@
escoafrica.c
om
254 20
7125694
Training, project support,
carbon trading (have
conducted numerous PV
trainings in Kenya and region
and managed UNEP regional
PV project)
Project management
(Managed $5M PVMTI project
on behalf of IFC-GEF)
N/A
Stephen
Mutimba
PO Box 76406,
Nairobi Kenya
smutimba@
camcoglobal
.com
Work:
3871027
/3877942/
3875902
N/A
Ashington
Ngigi
3rd Floor,
Occidental
Plaza, Muthithi
Rd, Westlands,
P.O. BOX
11463, 00100GPO
ashington@i
ntegraladvisory.co
m
254 (20)
3754853 / 6
Advocate
NGO
Advocacy. Produces Solarnet
magazine on quarterly basis.
Organizes "Solar days".
N/A
Andrew
Kilonzo
andrew.kilon
zo@gmail.c
om
+254
725509064
Kenya
Renewable
Energy
Association
RE
Association
Organizes trainings, conducts
industry outreach
N/A
Charles
Muchunki,
Chair
P.O. Box 42040
nthigaen@y
ahoo.com
+254 724
279972, 723
885135, 735
527041
Solar Aid
NGO
Involved in rural PV projects
John Keane,
Head of
Programmes
Nairobi office
john@solaraid.org
+254
717446158
Procures PV
systems for rural HH
and institutions
$100's of k
Plans in
Immediate
Future
Assembling
small PV kits for
rural people,
installing
systems in
schools
Website
www.camco.
com
www.solarne
t-ea.org
www.solaraid.org
Target Market Analysis: Kenya’s Solar Energy Market
21/24
Table 11: Government and Public Sector Projects
Name
Role in
Sector
Activities
Procurements
(Types of equipment/services)
Volume
kWp or $$$
Plans in
Immediate
Future
Contact
Address
Email
Telephone
Website
Rural
Electrificatio
n Authority
Government
rural energy
agency
Future procurer of
off-grid institutional
RE ststems
To be
decided
Government
energy
ministry
Procurer of energy
PV systems
Has
procured
>8M$ of PV
equipment
over 5 years
MoE PV system
procurements to
be handled by
REA
See above
James
Murithi,
Ministry of
Energy
Managing rural electrification
projects. On & off-grid.
Relatively new agency with
little solar experience.
Energy policy
Eng. Isaac
Kiva.
Director RE
Dept.
22-24 Floor
Nyayo Hse, Off
Uhuru Highway,
P.O Box 30334
dre@energy
min.go.ke,
ps@energy
min.go.ke
+254-20330048,
+254-20250680
www.energy
.go.ke
Energy
Regulatory
Commission
Government
energy
regulator
Energy regulations, pricing
None
None
Interested in PV
grid tied work
Frederick
Nyang
1st Floor
Integrity Centre
Valley Rd.
PO Box 42681,
Nairobi Kenya
frederick.nya
ng@erc.go.k
e
254-0202717627/31/
75
www.erc.go.
ke
0725
607728
Target Market Analysis: Kenya’s Solar Energy Market
22/24
4.2 Overview major and/or most emblematic solar projects
Ministry of Energy/Rural Electrification Authority Institutional Electrification
The Ministry of Energy has made at least 6 separate procurements over the past 6 years for PV
17
equipment in remote off-grid areas, totaling about $8M . The contracts are for rural schools, clinics
and institutions. All but one of the contracts was awarded to one company (the latest contract was
awarded to two smaller players that are not seen as major players). Several local PV companies
interviewed are not interested in participating in these tenders because of what they view as an
irregular procurement and specification process.
There are likely to be future procurements of large institutional systems through the Rural
Electrification Authority. The 2008 Rural Electrification Master Plan estimated a need for $50M in
stand-alone and mini-grid power systems, much of which will be PV and/or retrofitting of dieselpowered mini-grids with hybrid renewable energy systems. The World Bank is currently working with
the REA and MoE to develop a large (>$100M) rural electrification initiative that is likely to include a
PV component.
Solar Aid
Solar Aid is involved in projects to electrify rural households and institutions. They have opened a
small factory that assembles low cost small 5-20Wp solar electric systems. They are also involved in
electrification of rural schools on a semi-commercial basis.
17
The MoE did not disclose exact figures.
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