The Energy and Regulatory Authority (Epra) has put up new regulations that aim to allow businesses to sign 10-year contracts with Kenya Power and inject it into the national power grid.
This will apply to businesses that use less than one megawatt (MW) but lack the capacity to store excess electricity.
Kenya Power has been given the ultimate mandate of choosing who sends extra solar energy to the national grid in proposed laws that highlight issues over unfair competition and conflict of interest by the utility corporation that is also chasing business in the fast-growing area.
“The licensee (Kenya Power) shall examine all applications in Regulation 7 within sixty (60) days and on a non-discriminatory basis,” the Epra regulations partly said.
Several enterprises and an increasing number of homes are converting to renewable electricity, particularly solar, in order to have a cheap and stable supply in the face of lowering solar plant installation prices.
The large move to solar power by heavy consumers has pushed Kenya Power into an even more difficult situation as a result of excess electricity output.
Kenya Power issued an alert in November 2020, stating that some of its industrial customers — who represent for around 54.8 per cent of its sales income — are gradually transitioning to self-generated solar power, further straining the company’s already precarious finances.
Many businesses, institutions, and industries have switched to grid-connected solar photovoltaic (PV) systems to generate power for internal use, ensuring reliable supply and lowering operational expenses.
Solar power producers, according to the proposed guidelines, would sell excess to the grid and also receive supply from the grid, particularly at night when their output is low.
They will not, however, be able to obtain monetary compensation from Kenya Power for the electricity they export to the grid. This is because self-generation plants are intended to address the energy demands of customers and should not be used for commercial purposes.
If a solar user sells more power to the grid than he imports, the utility company will give him a 50 per cent credit for each unit exported, which will reduce his power bill the next month.
In the first three years of the net-metering scheme, Epra has limited the total installed capacity of solar plants that can be injected into the country’s grid to 100MW.
The decision to limit grid solar capacity for people and businesses at 100MW is intended to protect electricity producers and Kenya Power from revenue loss due to strong solar uptake.