Kenya is a leader in eastern and central Africa region when it comes to the adoption of solar power. In fact, only South Africa has more installed solar capacity on the continent.
What is not mentioned, though, is that almost all of the solar power installations in the country are stand alone - such as home solar systems – rather than connected to the national grid.
The Kenyan government has been trying to encourage more solar power use by making it easier for investors to make solar photovoltaic projects part of the national energy mix supply. This has been done through a raft of measures that include setting up a feed in tariff (FIT) to help investors understand what returns they might expect from providing power to Kenya’s national grid.
For a number of years now there has been no investor willing to put up a “grid-tied” solar photovoltaic project- but Strathmore University in Nairobi is set to change that. The university is putting up a 0.6 megawatt (MW) solar power project, tied to the national power grid, on the roof of its buildings.
The road to this project started back in 2011, when the university installed a much smaller 10 kilowatt (KW) solar power system on the roof of one of its buildings. The bigger 0.6MW solar power system is intended to supply the university with its electricity needs and allow it to sell the excess power to the national grid.
LOWER BILLS, GREATER EFFICIENCY
According to Geoffrey Rono who is the head of the energy research center at the university, the university wants to cut its electricity bill, and the project is in tune with the university’s policy of having energy efficient and sustainable buildings.
Investors likely will be keen to learn from this project how to go about putting up grid-tied solar projects. The university’s experience, however, points to some of the bumps in the road ahead.
Kenya has clear guidelines on the approval process for such projects. But a lack of efficiency by government agencies has meant the university’s project has taken longer to get going than expected.
But the major problem, Rono said, has been the low price offered for solar energy fed into the national grid which stands at 12 cents per kilowatt hour (KWh) or unit. The price “needs to be a bit higher”, he said, with a tariff of 20 cents per kilowatt hour considered ideal.
Making the change would require a stakeholders’ forum with the Energy Regulatory Commission. Currently the off grid tariff for a similar solar project is 20 cents per KWh.
The university expects to recover its investment in about 10 years time but the feed in tariff is probably the most important consideration for potential solar investors.
Investors have been interested in providing solar energy for Kenya’s power grid but what has been lacking is a viable business model. This is what Strathmore University has finally been able to formulate.
In its model, the university installs more solar power capacity than it can use. Measures are put in place to ensure that, overall, the university sells more power to the grid than it consumes from the grid. This cuts the university’s energy costs and earns it income as well, with the savings going toward paying off solar installation costs and, eventually, toward a profit.
Strathmore began as a business-focused institution and this may be one of the reasons that the university has been the first in the country to come up with a business model that makes such an investment a sustainable one.
NEED FOR SOLAR TECHNICIANS
This has spurred the university to set up a renewable energy center that will focus on training and research about renewable energy initiatives. One of the steps the center has taken is to train solar power technicians as part of the Kenyan government initiative to train 8,000 technicians by 2015.
With reports – particularly from President Uhuru Kenyatta’s recent visit to China - of more investors lining up to invest in large-scale solar power projects, the availability of qualified technicians to work on such projects and the success of a more projects like Strathmore’s will be crucial in building confidence and capacity.
Though the model applied by the university may not be applicable to every investor, it could be the catalyst that will finally steer the solar energy industry in Kenya to give as much attention to grid projects as to stand-alone ones.
Why has it worked at Strathmore? In part because the university is already connected to the national grid, so there is no need to spend on building expensive transmission lines from a remote solar facility. This suggests that the other immediately viable sites for grid-tied solar will not be in remote areas.
How soon could it happen? Probably when the distribution monopoly enjoyed by the government-owned electricity distributor is set to be removed. That is expected to happen sometime early next year after the Kenyan parliament discusses and approves a bill (the bill is currently before the house and has overwhelming support by MP’s) that seeks to end the monopoly.
Ray Obiero is a physics graduate of Kenya’s Egerton University and blogs for AlertNet Climate on climate change issues.