Kenya to enact new rules for solar energy producers

Kenya to enact new rules for Solar energy producers

Kenya is set to enact new rules and regulations for businesses and homeowners producing more than one megawatt of electricity from solar.

The Net-Metering Regulations 2022, now opened up for public scrutiny, will require all entities producing more than 1MW of electricity from solar energy to sign Power Purchase Agreements (PPAs) with the country’s utility firm Kenya Power.

The proposed regulations, in the final stages, comes at a time when the country is gearing for increased generation of renewable electricity amid an increasing shift in the number of homes and businesses that are switching to renewable energy, especially solar in a bid to have a reliable supply.

Under the requirements, clean power homeowners and businesses generate has been capped at one megawatt of power. The producers will be allowed to sell electricity to other consumers on a first-come-first-serve basis, but those producing more than one megawatt will be compelled to sign PPAs with Kenya Power to ensure fixed and predictable tariffs.

Kenya Power owns and operates most of the electricity transmission and distribution system in the country and sells electricity to over 8 million.

“The regulations are meant to avoid cases where people producing over one megawatt want to sell electricity to Kenya Power at rates higher than those contained under a typical PPA,” said an official from Kenya Power.

A typical PPA contains rates at which producers sell power to the State electricity distributors meaning that homes and businesses will supply the excess electricity to Kenya Power at fixed charges.

Large businesses and homeowners have over the past two years stepped up the shift to own-power production mainly with solar and bio-fuels in a move to provide affordable and reliable electricity.

The shift is also presenting a scenario where producers and consumers of power are generating surplus power that can now be sold to other users.

A net-metering arrangement allows a home or business to generate power for internal consumption and sell the excess to the national grid, which in this case is Kenya Power.

The regulations will bind power generated from solar, geothermal, small hydropower, biogas and biomass among other clean sources.

“All tariff applications, adjudications, and revisions will be conducted in line with the standard procedures of the Authority,” reads the regulations.

Homes and businesses generating clean power for internal use and sale must be licensed by the Energy and Petroleum Regulatory Authority.