The political economy of state-led transformations in pro-poor low carbon energy: A case study of solar PV in Kenya

Working Paper

International efforts to achieve goals such as universal energy access and climate change mitigation are expected to stimulate billions of dollars of private financial flows to developing countries for clean (energy) technology transfer investments. Policies for realising these ambitions are framed in terms of neoliberal development orthodoxy, but critical voices call for more active state intervention based on arguments showing that free markets alone will not deliver the needed technologies and other innovations with the urgency required. This sets up the potential for a confrontation of contradictory ideologies in the making and implementation of policy: neoliberal orthodoxy at the level of global agreements versus state-led developmentalism at the national level. What this will mean for action on the ground, as those who promote clean energy access technologies and innovations seek to realise their development goals, is an open question.

This paper analyses the case of the solar photovoltaic (PV) market in Kenya as a way to explore this and other issues. The Kenyan PV market is considered one of the most successful off-grid markets in the developing world and is often hailed as an exemplar of neoliberal development orthodoxy. However, based on reinterpretation of existing STEPS research into the evolution of this market, which took a niche theory approach, we argue that the Kenyan PV niche and market would not have developed without the support and active intervention of donors, many of whom – paradoxically – espouse neoliberal policy prescriptions. Drawing from discursive institutionalism, we develop a political economy lens to reinterpret our existing research, and find that the Kenyan PV niche is now facing an uncertain future, even as the solar PV market may continue to flourish. At a more general level, we reflect on what the case tells us about future encounters between neoliberal orthodoxy and more developmentalist aspirations, encounters we might expect to increase in the process of realising the policy ambitions noted above. We argue that, if the Kenyan case acts as an example of a more general phenomenon, we need to understand policy making in its context, paying attention to historical socio-political relations across ‘scales’ of policy action, from the global to the local. The Kenyan case illustrates that action on the ground will likely be the outcome of messy negotiated interactions between competing and contradictory ideologies rather than determined simply by powerful global forces such as neoliberal hegemony.