For how long can government win the monopoly war by legislation?

Entrepreneurs and investors should be encouraged to invest in the energy source to diversify our energy portfolio and encourage economic expansion.

By David Onjili

Both innovators and technocrats operate in one environment. Ideally, theirs should be a symbiotic relationship but oftentimes, especially as we have seen in Kenya, this is never the case. Our government has often rushed to pass legislation that in the long run has stifled innovation.

The most memorable instance where legislation has taken a back seat and allowed innovation to take the lead is the case of M-Pesa, but even then, there were overriding personal and state interests that were at play.

Solar energy is not a new phenomenon. Across the country, small-scale traders and even rural households use it mostly for household needs. There are families and even industrial complexes that have invested in solar energy as to be independent of the chokehold that Kenya Power (KP) has on the country’s energy sector. KP, a state corporation, has enjoyed monopoly in supplying the country’s domestic and industrial power, largely because some of its biggest shareholders make up what Kenyans have come to know as the ‘deep state’.

There have been scandals aplenty, including ones touching purchasing electricity tokens, deliberately planned power outages, and otherworldly bills that KP cannot explain. Most notable was the class action lawsuit under the hashtag #SwithchOffKPLC led by lawyer Apollo Mboya following overcharging of electricity tokens. An obscure out-of-court settlement between KP and Mboya was reached, much to the chagrin of Kenyans, many of whom had fundraised to fund the suit. The settlement, which allowed KP to continue with its expensive tokens regime, didn’t make sense, especially because KP had admitted to sending customers false bills and in return getting ‘illegal’ payments.

When it emerged in November that KP was staring at huge consecutive losses, partly because a number of heavy electricity consumers had switched to solar energy, it wasn’t unexpected.
London Distillers, for example, had installed a 1MW solar roof in their Athi River plant, with projections that the panels, which have a 25-year lifespan, would save the company some Sh18.4m annually. Elsewhere, Moi International Airport is installing a 500kW photovoltaic system, and the International Centre of Insect Physiology and Ecology (icipe) has invested Sh278 million in two photovoltaic solar cells estimating to save icipe Sh12m annually in electricity expenses.

Kenyans on social media received these revelations with excitement, going as far as to predict the ‘death’ of KP, with many expressing intent to install solar power or other alternative sources of clean energy. The response by the government was swift.
Through the Energy and Petroleum Regulatory Authority (EPRA), the government tabled draft Energy (Solar Photovoltaic Systems) Regulations 2020, which seek to streamline the manufacture, importation, installation and maintenance of solar components and systems.

In the proposed regulations, EPRA has set tough requirements for solar products. It wants all solar equipment imported into the country or manufactured to be of high quality, including meeting the Kenyan standards. The makers and traders of solar products will also need to register with EPRA.

Reacting to the move, the Kenyan Senate poked holes in the proposed regulations which they say could slow down the uptake of the energy source.

Members of the Senate Committee on Energy on December 9 said the proposed conditions – which solar technicians will have to meet to be authorized to practice, including relatively high licensing fees – had been deliberately fashioned to protect some energy sector players such as Kenya Power against the competition.

“The committee is not convinced with the (Energy) Ministry and the Energy and Petroleum Regulatory Authority (EPRA) responses that these regulations are not meant to protect the interest of KPLC as a monopoly,” said Committee chairman Ephraim Maina during a virtual meeting with Energy Cabinet Secretary Joseph Njoroge and EPRA Director General Pavel Oimeke.

In the regulations, a solar technician is required to pay between Sh2,250 and Sh6,000 to obtain and renew a license. A contractor, on the other hand, will pay between Sh3,000 and Sh6,000 for a license. The licenses will be valid for three years, with practitioners required to apply for renewal one month before the expiry date.

Both technicians and contractors will also be required to obtain insurance policies for their licences of between Sh1 million and Sh10 million, according to their respective licence classes. 

Practising with an expired licence will attract a penalty of Sh50,000 per day for the period in question.

Licenses are based on the capacity of the system to be installed. License classes SPW1, SPW2 and SPW3 are for solar systems with a capacity of not more than 400 watts, 2kW and 50kW respectively. Only SPW4 technicians will be allowed to install solar grids of any capacity.

While there is nothing wrong with licensing itself. In fact, it is imperative that we prevent unqualified operators from handling energy installation, and prevent counterfeit solar panels from infiltrating the market. But attaching an installer’s license to the requirement of a bachelor’s degree seems like punishing qualified installers who are not fortunate enough to hold a degree, and seems like a move meant to drastically reduce the number of installers who can undertake the job, thereby slowing down uptake.

Licensing is sensible and commendable; we cannot allow quacks to handle energy installation especially for commercial and even domestic use. A stakeholders’ forum is needed so that views from all industry layers are taken in. Regulation by government will also protect consumers from counterfeit solar panels infiltrating the market. Already the media (print and electronic) are running adverts and luring consumers to purchase solar panels.

Data available shows that solar energy is quite underutilized as compared to alternative sources like wind, and it would be counterproductive – especially at a time when other government are making commendable efforts to develop clean energy to combat climate change – for government to stifle solar energy with stringent regulation. On the contrary, entrepreneurs and investors should be encouraged to invest in the energy source to diversify our energy portfolio and encourage economic expansion. (