Policy brief – Action needed to level the playing field for domestic solar PV companies

January 27, 2021

Kenya has long been a frontrunner in the diffusion and uptake of solar PV technologies. This has created a mature and vibrant market, with large investments coming into the sector, worth USD 467 million in 2018. This growth in the solar PV market presents opportunities for the Kenyan economy going beyond clean energy and access to electricity in rural areas to include benefits like industrial development, private-sector development and job creation.

The market is largely driven by international companies who have a competitive advantage in terms of their better access to financial resources, expertise and technology. At the same time, domestic solar entrepreneurs and domestic companies face both financial and non-financial challenges that are restricting their ability to upscale and take full advantage of the prevailing market opportunities. It is therefore timely to accelerate support targeted at domestic solar PV companies to enable them to expand their businesses, grow their portfolios and improve their competitiveness.

Domestic solar companies, like any other micro-, small and medium-scale enterprises (MSME), rely on a well-functioning business ecosystem to support their growth and competitiveness. This includes, for example, financial instruments designed to meet the specific needs of domestic companies (e.g. small-ticket investments), targeted competency-development initiatives and targeted incentives for local entrepreneurs through concessional loans, as well as market and sector insights that are of specific relevance to domestic companies and their potential investors.

Our newly published policy brief presents insights gained from the TEMARIN project and recommendations on ways to improve support for the domestic solar PV sector in Kenya.