New Energy Regulations in Kenya a Boon to Suppliers

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New Energy Regulations in Kenya

In 2012, the Energy Regulatory Commission (ERC), a Kenyan state body whose mandate among others includes regulating electrical, renewable and other forms of energy, announced a raft of new energy regulations aimed at reducing reliance on traditional non-renewable energy sources and putting Kenya on a path to institutionalizing the use of solar power, which is not only clean but also free and inexhaustible.

The new requirements were contained in the Energy (Solar Water Heating) Regulations, 2012. Broadly, ERC would require that:

  • All premises within the jurisdiction of local authorities with hot water requirements of a capacity exceeding one hundred litres per day shall install and use solar heating systems.
  • Within a period of five years from the effective date of the Regulations, all existing premises with hot water requirements of a capacity exceeding one hundred litres per day shall install and use solar heating systems.
  • An owner of premises, Architect and an Engineer engaged in the design, construction, extension or alteration of premises shall incorporate solar water heating systems in all new premises designs and extensions or alterations to existing premises.
  • An electric power distributor or supplier shall not provide electricity supply to premises where a solar water heating system has not been installed in accordance with the Regulations.

The affected premises effectively includes all domestic dwellings or residential houses, commercial buildings (including hotels, lodges, clubs, restaurants, cafeterias, laundries, eating places and similar premises), health institutions (including hospitals, health centres, clinics and similar medical facilities), educational institutions (including universities, colleges, boarding schools and similar institutions).

While owners of pre-existing affected buildings still have a two-year window to install solar water heaters in their premises, developers, owners, architects and engineers engaged in the design and construction of new buildings and extensions or alterations of pre-existing affected buildings have to comply immediately. For new or upcoming buildings, the regulations are likely to have far reaching effects because they impose an obligation on any electric power distributor or supplier (including the Kenya Power) to refrain from providing electricity to any affected buildings if solar water heaters have not been installed in accordance with the regulations.

Although the rules came into force in May this year, the ERC granted a further extension of six months to enable property owners to arrange for financing and installation of hot water systems in their premises. Upon the expiry of this extension, the organization is empowered by law to carry out inspections for purposes of enforcement and has already indicated its readiness to do so.

The ERC’s preliminary audits show that 150,000 of three million buildings (both new and old) have installed hot water systems – leaving thousands in the regulator’s crosshairs. The hospitality industry has recorded the best compliance for both sets of buildings. Boarding learning institutions are among those that have shown poor compliance.

The solar kits are expected to help conserve energy and lower demand for electricity as increased economic activity and connection of more homes to the grid put pressure on existing power generation plants.

Besides, installing solar panels could help homes slash electricity bills by up to 20 per cent and water heating costs by up to 60%. But property developers have cited prohibitive costs of solar heaters as a deterrent to increased uptake.

Also Read: Why Africa needs to adopt Solar Water Heating

The cost of a complete solar water heater system for domestic use ranges between KSh125,000 and KSh150,000 (approximately US$1,200 and US$1,400) per unit and between Sh600,000 and Sh2 million (US$ 5,700 and US$19,000) for commercial buildings.

While the new rules have been received by the affected parties with some dismay due to cost implications, they are a boon to suppliers of solar water heaters and related services. Already, many of these companies are reporting a surge in enquiries and sales of solar water heaters unlike in the past where they relied on salespeople to push their products in the market.

The number of new entrants in the sector is also rising with many companies rushing to supply the soon-to-be lucrative market.

In the coming months, competition is guaranteed to be even fiercer and the determinants of success in this sector will largely depend on pricing, quality and after-sales service.

Suppliers

As the deadline for compliance with the ERC’s Solar Water Heating Regulations draws nearer, companies in this sector a preparing to reap the windfall. The uptake of solar water heating systems is already on an upward trend with many developers now obligated to provide the facilities at the conception stage of projects. Existing users are also realizing that they may get caught up in last-minute rush and are slowly but steadily installing the systems.

Quality and pricing as well as ability of suppliers to provide reliable after-sales service will play a huge role in determining a customer’s decision to select a particular supplier. Being a fairly huge investment, few buyers are willing to stake their money in a product that is unlikely to serve them efficiently for a reasonable period. Customers, especially individual home owners and institutions, would also be looking for a return on investment through significant reductions in energy costs within the first three or four years after installation.

There are a number of reliable companies that supply quality solar water heaters among a myriad other energy-related products. Some of these are fairly new in the business while others are established organizations that have amassed substantial expertise in these products. Most of the solar products are sourced from Europe and Asia (mostly China).

Hotpoint Appliances Limited

Hotpoint Appliances Ltd has been in the East African market for the last over 30 years and has become a household name trusted by the market. In the last eight years, the company has diversified into engineering and five years ago started offering renewable energy solutions.  Hotpoint Appliances offer complete solutions i.e. design, supply, commissioning and maintenance of solar systems both for water heating and power generation. For water heating, they offer both split/centralized solutions and thermosiphon systems from a low capacity of 100 liters to as much as space can allow. According to David Maranga who is a Product Manager with the company, adoption of solar energy systems is a prudent decision owing to the rising cost of living and doing business. “Many people have started to appreciate that solar is a worthy investment with a very short payback period and long-term benefit,” he says, adding that technology has changed over the last few years making it more affordable and efficient. He however cautions that in a market filled with cheap solutions, due diligence is important.

Chloride Exide

Chloride Exide is another well known name in the solar energy sector. Established more than 50 years ago, the company has been at the forefront of renewable energy solutions including solar and wind power harnessing.  Their solar water heating systems are long lasting, efficient, user-friendly and low maintenance.

Negawatt Limited

Negawatt is a relatively new entrant on the solar energy solutions market though the people behind the company have extensive experience in the field. The company supplies and installs Led Lights, Solar PV, Solar Water Heating, Solar Street Lights, Solar Consulting and Feasibility studies. Their products are sourced from Germany, UK, France, Australia, India and China. Operations Manager Isaac Kiunga says Negawatt distinguishes itself from the competition by offering affordable Tier 1 products with robust design. The fact that they systems are turnkey and financing arrangements can be made for the customers are other attributes that attract customers to the company. According to Mr. Kiunga, there has been “a tremendous uptake” of solar products in the last few years. He advises prospective customers to go with experienced suppliers who can guarantee quality.

Orb Energy Kenya Limited

Orb Energy is an international company headquartered in India and has been operating in Kenya since 2013.  It provides solar energy solutions to both residential (home owners) and commercial (industries, schools, hospitals) customers looking to harness solar energy. The company’s products are made at its manufacturing plant located in Bangalore, India. According to Mr. Dennis Otieno, who is the company’s Marketing & Communications Executive, Orb Energy is setting new standards in the solar industry. “We have uniquely designed solar photovoltaic and solar water heating systems, and we manufacture, sell, install, and service these through our own branch network to better control the customer experience,” he says. “We service residential and commercial customers, and we work with banks to enable our customers to take solar loans,” he adds.

For solar water heating, the company offers its Sunstream Solar Water Heating System which is available in 150, 200 and 300 litres.

When it comes to choosing a supplier especially for projects, Mr. Otieno advises: “Your solutions partner should have diverse experience in systems integration and commercial project management, with a demonstrated track record of delivering projects on budget and on time. The company should be well-versed in local and national building codes as well as detailed reporting and organization.” He also cautions against dealing with inexperienced suppliers with questionable products and no after-sales service. “With the infiltration of many subpar systems into the market, it is best to be sure of the quality of systems being purchased,” he says; adding that, as with everything else, in solar energy products, cheap is expensive.

Go Solar Systems Limited

Go Solar Systems Limited has been supplying solar products and services for more than 10 years. Based in Nairobi, the company sources its products from Germany, Turkey, United States of America and China. These include integrated solar street lights from 5W-60W; LED Floodlights from 10W to 110W; LED Streetlights 30W and 60W; Rechargeable LED Floodlights 20W and 30W and Hot Water Systems from 100l to 300l. According to Mary Omanga who is a Marketing Executive with the company, there has been a tremendous growth in energy efficient heating and lighting systems in recent years. This has brought down costs. She also notes a rise in smart systems that are remotely controlled.

Davis & Shirtliff

Davis & Shirtliff is well known as a leader in water and energy solutions. The company’s Dayliff Solar Water Heaters have a capacity of between 160 and 320 litres. Dayliff solar heaters are tried and tested and with the benefits of a high efficiency Turkish sourced collectors and long life GRP cased tanks are particularly suitable for local conditions.

Makilite Energy Solutions

Makilite is a relatively new company specializing mainly in solar water heaters.  Its products are manufactured in Greece. Beatrice Kagochi, who is the company’s Sales Administrator, says the company’s products are low priced but high quality and advises consumers to invest in solar water heating to reap savings in electricity cost.

Tafsiri Pure Energy Solutions Ltd

Tafsiri Pure Energy Solutions Ltd is an eight-year old company that supplies, installs and services solar water heating units for domestic homes, hotels, lodges, serviced apartments, schools and institutions. Their products are made in Turkey and Spain. Managing Director Ken Macharia notes that even though the new law has resulted in an increased uptake of solar water heating products, many developers, home owners and institutions have been gradually transitioning to solar energy for some time.

Argos Group Limited

Argos Group Limited is another player in the sector. The company offers a wide range of solar related products. These include commercial and domestic solar water heating systems, commercial and domestic solar pool heating systems, solar based LED lighting solutions, solar road signs, solar floodlight systems and solar power storage devices (batteries and power banks). Others include solar chargers for small appliances, small solar lighting units and solar power generation systems from 500Watt to well over 10MW. “We also tailor-make solar systems to meet any customer demands for the need that they have,” says Anthony Chacha, the Group Executive.  He advises prospective clients to choose their solar solutions wisely and not compromise on quality. “Solar is a long term investment and the wrong quality will result in a long term regret due to poor and dismal system performance, not to mention the obvious loss of money involved in the transaction. Cheap is very expensive,” he adds.

Helios Agrosol Limited

This is a relatively new company on the Kenyan market. Helios Agrosol Limited offers solar water heating solutions from a capacity of 120 litres to 9,000 litres. The company serves homes, hotels and hostels. Its products are imported from Greece. According to Managing Director Mahesh Halai, Helios Agrosol products are reasonably priced and are manufactured using the highest quality of raw materials. “We offer a 5-year warranty for every system we supply and install,” he adds. Mr. Halai advises customers to understand the product, taking into consideration the installation location, water quality and hot water requirements to be able to make an informed choice. He says although price is an important consideration, warranty, after-sales service and availability of parts are of utmost importance.

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