Foreign investors eye growing Kenya solar panel market

surges. Market watchers say East Africa’s largest economy is both a frontier market and strategic gateway for overseas manufacturers of solar panels willing to explore the nascent market renewable energy technologies.
Macro-economic stability combined with policy and regulatory incentives from the government has created a conducive environment for foreign investors to penetrate an expanding market niche for solar panels.
According to policy briefs from the Ministry of Energy, Kenya has accelerated the shift to renewable sources of energy to become a green economy powerhouse. Renewable sources of energy including solar, wind and geothermal are critical to meeting both domestic and industrial demand for electricity.
Kenya’s Vision 2030 blueprint states that for Kenya to attain middle income status, access to electricity must expand from a national average of 30 percent to 70 percent. Both domestic and overseas investors are convinced that rapid economic growth has the potential to convert Kenya into a hub for renewable energy accessories.
“Kenya, like other fast growing economies in Africa, is a major market for solar panels. It is a frontier market that should invest in solar energy to bridge connectivity,” said Benjamin Yu, the manager of the marketing department at Chinese firm Suntech Power Holdings.
“We have one of the biggest market share in Africa. Suntech is distributing solar panels across Kenya, Senegal and Nigeria,” Yu said.
Suntech is the sole distributor of an innovative solar accessory that can use both diesel and sun rays to light homes.
“We provide hybrid solution (solar and diesel) to enable rural communities meet their energy needs,” Yu said.
He clarified that Europe and the United States offer the largest market share for Suntech solar panels. Yu stressed that Kenya is a growing market for solar panels as the government encourages them to address gaping energy deficit in rural areas and pockets of urban informal settlements.
“The Kenyan government is keen on green energy and we are willing to be part of this transformation,” Yu said.
Dean Lotter, the managing director, Sub-Saharan Africa subsidiary Sovello, a German manufacturer of solar panels, disclosed that “we are entering the Kenyan market in the next three months and intend to open an office in Nairobi and recruit staff to work for us.”
Lotter added that all manufacturing will remain in Germany but stocking, distribution sales and marketing of the products will remain in South Africa and Nairobi. Kenyans are willing to invest in solar panels to light their homes and retain modern lifestyles.
“Sovello will provide both on grid and off grid solution to inadequate access to electricity,” Lotter said.
The group intends to work with national grid to supplement hydropower sources that provides 60 percent of Kenya’s energy needs.
“We look forward to partner with power utilities to provide on grid solution to energy deficit while focusing on how to reach rural areas that are not connected to the national grid,” Lotter said.
He stressed that this approach is “a sustainable business model that will be scaled up to cover the entire country”. Lotter decried myths that regard solar energy as a luxury for rich economies and reiterated that the technology is ideal for developing countries willing to chart a low carbon pathway. He urged the Kenyan government to implement policy and legal incentives to attract investments in solar energy.
“What we are asking is some rebate from power utilities but in a structured manner. The government can develop innovative policy and regulatory frameworks that make it easier to do business in an environmentally and socially conscious manner,” said Lotter. — Xinhua.
Jurgen Kranemann, the Business Development Manager, Power Generation at AEG, a German company, says he has spotted opportunities in solar business in Kenya and the east African region.   AEG has focused on emerging economies in Africa, Asia and Latin America where demand for solar accessories is rising.   According to Kranemann, “this region has huge potential for renewable energy development that is yet to be exploited fully. We plan to establish strong presence in Kenya which is a litmus test on market trends for solar panels in East, Central and horn of Africa.”  Enditem