Transforming pro-poor energy access is a priority goal for many countries in Africa. Many poorer households are not connected to the grid, so use kerosene, paraffin or batteries, or have to travel to charge mobile phones.
In Kenya, solar home systems (SHS) via mobile payment systems are tackling this problem by giving access to renewable energy for an increasing number of rural households. The systems allow people to pay easily in instalments for solar panels and other equipment, reducing their upfront costs and giving households – even in remote areas – a reliable, off-grid source of electricity.
While the technology has widely been accepted and recognised as disruptive, both in Kenya and abroad, it has not been straightforward to get it adopted. There are still political, technical and social barriers for SHS to be a strong, sustainable part of Kenya’s energy supply.
To address these problems and look for innovative ways forward, the Africa Sustainability Hub convened a Transformation Lab (T-Lab) in Nairobi in March 2017. Held over 2 days, the T-Lab brought together a diverse group with different forms of expertise related to SHS and Kenya’s energy policy, including in research, policy-making, NGOs, the solar industry, business incubation, journalism and the law. The T-Lab explored the challenges faced by SHS in the context of national energy policy and how it could be part of a more fundamental transformation to sustainability.
T-labs aim to be a platform for social change by allowing different interest groups to open up about their knowledge, interests and solutions to particular sustainability issues – thereby promoting more open leaning and negotiations for more inclusive solutions. The Kenya T-Lab in March was part of a wider project on Transformative Pathways to Sustainability in six countries around the world.
How mobile-enabled Solar Home Systems work
Mobile payment systems for SHS build on the mobile money services offered by various banking and telecommunication companies. One major mobile-enabled SHS service is M-KOPA (M-Mobile KOPA- borrowing), founded in Kenya in 2011. M-KOPA builds on the mobile money transfer system M-Pesa (‘’M’’ = Mobile and ‘’Pesa’’ = Money), which originated in the Kenya-based telecommunications company Safaricom.
M-KOPA is designed to suit the needs of low-income households and customers who live on less than $2 a day or spend an average of $150 per year on kerosene alone – around 20% of their household income. The scheme provides a set of solar products to choose from, including a solar panel and lighting system, a TV, a radio and a battery charger. Customers pay a deposit to acquire the system and take it home, and then repay the balance in instalments. The customer’s Safaricom line acts as a guarantee for the loan, but also allows them to get information, credit and technical support.
Initial studies focusing on the M-KOPA case have suggested that, within a period of less than 5 years, about 450,000 homes (mainly the rural poor in East Africa) have been connected to solar power. About 500 new homes are being added every day.
Despite this success, there are a number of political, technical and social challenges for Solar Home Systems in Kenya in providing sustainable, pro-poor energy access. At the T-Lab, we looked at each problem in itself, but also how they are connected and who is responsible for addressing them. A ‘World Café’ method, which involved small group discussion with participants moving between themes clustered around tables, was used to break down the debate.
1. Politics and policy
The political challenges for SHS are apparent if viewed through the broader lens of energy policies in Kenya.
The State plays a key role in regulating the energy mix in Kenya. It makes decisions on generation, transmission, distribution and revenue management. However, the organisational arrangement for Kenya’s energy mix is largely centred on on-grid energy with little focus on off-grid options such as solar. The State has remained hesitant to support off-grid generation, which is mainly driven by non-state actors such as NGOs, SMEs, and development agencies among others.
Despite this domestic commitment to on-grid energy, Kenya’s Ministry of Environment and climate change Secretariat has developed policy documents in line with the global environmental agenda, which emphasise solar as a priority ‘green growth’ option. Kenya’s Nationally Determined Contribution under the Paris Agreement gives particular attention to solar as a source of low-carbon, climate-resilient energy – among other options like geothermal and wind.
However, Kenya’s Least Cost Power Development Plan (LCPDP) 2011–2031 excludes solar energy. This could be seen as an attempt to safeguard the energy market share currently under control of the State. Ultimately, this political challenge will affect the regulation, coordination and market expansion of mobile-enabled SHS. Although off-grid options are driven by non-state actors, they are still subject to the State-led organisational and regulatory arrangements under the Ministry of Energy and Petroleum. In short, Kenya’s international policy commitments to solar energy are not being reflected in its domestic energy plans.
2. Regulation and quality
The lack of a coherent policy on solar energy has given room to a proliferation of actors seeking to do one, two or three things about solar – but with little coordination and regulation. This has made it difficult to develop a clear perspective on the social, economic and environmental trajectories of mobile enabled SHS in Kenya.
The lack of coordination and low level of government interest has also led to weak regulatory and quality enforcement of solar equipment imports. Insights shared during the T-lab indicate that Kenya has been a recipient of cheap and low-quality solar equipment, which has quickly degenerated into e-wastes and associated health and environmental hazards. Such outcomes negatively reflect on the future of mobile-enabled SHS.
3. Social challenges
Aside from these political and regulatory challenges, there are socio-technical challenges too. For SHS schemes to be truly transformative, they should include the very poor. But while the scheme focuses on households spending a proportion of their earning on paraffin, the initial costs are still too high for some poorer households. Access to the scheme is also difficult for those without a reliable mobile signal – including pastoralists who move through remote areas.
Education is also an issue. Households with poor levels of literacy and education are disadvantaged in making informed choices about SHS equipment and vendors. There is a lack of independent awareness-raising and information on SHS, apart from the sales pitches from vendors or companies.
How to address these challenges
What could be done to build on the successes of SHS, and address its challenges, to make it part of a transformation to sustainability?
The T-lab offered some useful insights and learning points, and a number of options were raised. The idea here was not to close down the process or to come up with conclusive solutions, but rather to allow for emergence of various options and pathways to addressing a range of challenges in a much more open, inclusive and broad manner. Some of the options that emerged include:
- Rethinking the green tax regime e.g. by lifting the tax rebates and using the resulting revenue to strengthen domestic manufacturing capabilities, thereby creating employment and brands which are easy to monitor for quality.
- Lifting tax rebates could also close some loopholes that allows for infiltration of the Kenyan solar market with cheap, low quality solar equipment. This will also reduce the e-waste menace.
- Negotiating on-grid and off-grid quotas and/or shares in the energy mix.
Participants’ perspectives on these options were documented in various forms, including video, and will form the basis for more concrete ‘closing down’ to a set of actions during a second T-Lab in 2018.
Who is responsible?
During the T-Lab, a stakeholder mapping exercise was conducted to review who was involved in the system and how they could contribute to transformation. We found that most solutions still rely on the government, even though a lot of space does exist for non-state actors to play a transformative role.
The State remains key in regulating both domestic and international solar processes. Reviewing green taxes, reinforcing quality and social and environmental standards, and strengthening coordination of actors involved in the solar industry, are critical roles for state agencies. In line with the Sustainable Energy for All agenda, the State has a major role in rolling out a clear implementation plan for solar, including social protection policies against cheap and detrimental equipment.
However, there are other players too. Non-state actors such as advocacy groups, the private sector, SMEs, NGOs and grassroots movements also have a crucial role in making mobile enabled SHS transformative.
Private sector players could support economic transformations through diversifying credit sources for poorer households, and diversifying solar products to match the needs of all, including the poorest of the poor. Private sector business players such as M-KOPA have shown that they have potential to make this happen, but need to think through the problems of access for poor and remote households.
Other non-state actors, such as advocacy groups and civil movements, could support more advocacy, better environmental and socially inclusive standards, and compensation, guarantees and insurance schemes for poorer consumers – especially those with little information or independent advice on their SHS.
The role of non-state actors, however, remains hampered by a lack of stronger and coordinated solar movements that could push for certain positions. Most dealers in the technology prefer to keep their unique business ideas or business processes to themselves. Coordination is discouraged by the high level of competition for profits and business patents, which cannot be easily shared openly, given the weak intellectual property regime in Kenya. Indeed, the T-Lab was seen as being one of the few opportunities to create a space for open and honest discussion of the issues.
A key insight of the T-Lab was that the State and non-State actors can only achieve transformations if they work together.
Even if the State were to effectively play its regulatory role, this might not achieve effective transformations if the role of non-state actors such as SMEs and civil groups who drive things or make things happen on the ground is not taken into account.
The dilemma in Kenya, as in most developing countries, is that these two sets of actors have often operated in parallel, and especially in the solar context. The conflict between the State, trying to secure its access to on-grid energy markets, and the off-grid solar industry, is an important one.
In this context, a third set of actors could actively play a crucial mediation role. This would involve technology brokerage, investment brokerage, and knowledge brokerage between the regulating stakeholders and the implementing, executing stakeholders. In this, regional bodies such as the Africa Sustainability Hub, the African Centre for Technology Studies, the East African Community (EAC), and the Africa Group of Negotiators (AGN) among others were highlighted as critical in mediating between technologies and competing interests. These bodies, considered as neutral, non-partisan and sectorally unbiased, could play a more neutral role compared to a nationally-led mediator.
This T-Lab served to open up a number of challenges and options to address them – especially around coordination and mediation between different groups involved in energy policy. The feedback from participants suggested that it had helped to open their minds to options and challenges that they had not previously considered.
The challenge leading up to the next T-Lab in 2018 will be to look at how to ‘close down’ again around a set of concrete actions. This might include creating a strategy paper for key policy and private players, and creating a community of practice. The organisers of the T-Lab will use this time to reflect on the methods used, and how these could be adapted for the next event.
Kennedy Liti Mbeva (ACTS) and Reuben Makomere were involved in the T-Lab and provided material towards this blog post.