ENERGY: Building on President William Ruto’s pledge to transition to green energy by 2028, experts yesterday urged relevant authorities to consider extending incentives like tax holidays to small and medium enterprises (SMEs) making the transition to clean energy.

Kenya eyes 100 per cent shift to clean energy in the next five years, but a United Nations– led body believes that private sector participation and particularly SMEs will help accelerate that target if Kenya is to quickly lower reliance on fossil fuels. “To create vibrant markets for energy efficient lighting and appliances, consumer choice, policies, and regulations, as well as private sector engagement are some of the key factors that require addressing,” said Kawira Bucyana, the United Nations Industrial Development Organisation (UNIDO) Country representative.“Conversations like tax incentives can go a long way,” she added during the Energy Efficient Lighting and Appliances (EELA) forum in Nairobi.

Such priorities, Bucyana said, can help accelerate the country’s evolution to a green and net-zero future which the current administration hopes to achieve two years earlier than the original 2030 timeline.

“I think leaning on fossil fuel is not an option in the face of the reality of what we know is happening to our globe. We need to make difficult decisions, and the rest of the world needs to help Africa make the difficult decisions, work with the just transition of our energy, work with ensuring that we go green,” said Ruto on the sidelines of COP27 climate summit in Egypt last year.

Kenya’s current energy mix predominantly consists of green energy with geothermal, hydro, wind, and solar accounting for roughly 81 percent of the total energy consumed in Kenya.

But consumer discontent resulting from the ever-rising power bills, frequent blackouts as well as bureaucratic controls, have continued to hamper the sector’s growth potential with the latter prohibiting local investments in areas like solar energy.

Solar companies

Private solar companies, for instance, have cited among other reasons, the need to cut costs and meet internal green goals for putting up small-scale plants that are powered mostly by renewable energy sources.

There have been suggestions to the amendment of the Kenya Finance Act of 2021, whose outcomes should see such firms avoid hefty Value Added Tax (VAT) charges on specialized solar-powered equipment and accessories including deep cycle batteries which use and store solar power. It is meant to support the supply of solar equipment in Kenya.

But Alex Wachira (pictured) – Principal Secretary in the State Department in the Ministry of Energy in a speech read by Wycliffe Ogolla – the ministry’s Secretary Administration, noted the need to fully implement Kenya National Energy Efficiency and Conservation Strategy, should help in addressing the aforementioned challenges in meeting the energy efficiency goals as well as reduce the demand for fossil fuels and related greenhouse gas emissions.

Value Added Tax (VAT) on products is always passed on to customers in the form of higher prices, making solar products unaffordable to low-income, vulnerable, and offgrid households.– Steve Umidha