Special Report Africa: Kenya

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pv magazine: What is driving solar PV development in Kenya?

Cossen: Solar PV development in Kenya was driven in the past by the efforts of the government of Kenya to increase rural electrification. Kenya has made significant progress in increasing access to electricity for its population in recent years. Projects driven by the government are installations for rural health centers and schools, but most recently also PV-diesel-hybrid systems for isolated mini-grids.

In recent years, grid-connected solar PV has become more and more attractive in Kenya due to falling PV prices and rising electricity prices. In some market segments, grid parity seems to be reached and private investment is starting, e.g. 72 kWp installed at the flower farm Uhuru Flowers.

Utility-scale projects have not yet been installed. Market experts attribute this to the relatively low Feed-in-Tariff of US$0.12 per kilowatt hour.

pv magazine: What kinds of incentives are available and are utilities playing a role?

Feed-in tariffs (FiTs) for power from renewable energies were firstly introduced in March 2008. The last review took place in December 2012. The scheme is technology-specific. The tariff for solar is fixed at US$0.12 per kilowatt hour. The main principle, which underlies the calculation of the FiT, is that the tariffs reflect the generation costs plus a reasonable investor return. Furthermore, the tariffs shall not exceed the generation long run marginal costs (LRMC), which are US$0.12 per kilowatt hour, according to the Least Cost Power Development Plan for Kenya.

The FiT comes with a priority purchase. The costs of interconnection, including the costs of construction, upgrading of transmission and distribution lines, substations and associated equipment are to be borne by the project developer. For reducing the transaction costs associated with negotiating and signing a PPA [power purchase agreement], a technology-neutral standardized PPA was introduced for projects up to 10 MW in December 2012.

Besides the FiT, net metering was introduced by law by the end of 2012, but the implementation regulation is still under preparation. Net metering would allow commercial and industrial consumers in Kenya to install solar systems to reduce their electricity bill, feed-in the surplus to the grid and get a credit on their electricity bill for the supplied electricity. At least a dozen projects that want to make use of this scheme are currently in development. Once the net metering regulations are in place, these are likely to grow into a sector that is larger than the off-grid sector in the mid term.

pv magazine: Who are the major international solar players currently doing business in Kenya?

Cossen: German companies have a good reputation in Kenya. Out of three grid-connected PV plants, two have been installed by German companies, Energiebau and Asantys. Inverters from SMA are often used in larger installations.

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