Fake solar goods burn holes in customers purses

As dealers in solar products position themselves to exploit opportunities presented by rising energy costs in Kenya, unscrupulous traders are also cashing in on the boom. There are reports that fake solar inverters, bulbs and batteries have flooded the local market stifling growth of local industries and leaving consumers at the losing end.

Electricity costs have gone up by a third over the year as power producers and distributors pass on the costs of oil prices to users. The expected rise in demand for solar power alternatives has attracted more dealers with most electronics outlets in downtown Nairobi now fully stocked.

In urban areas there is little business apart from that of power back up systems in case of blackouts. Last month, Kenya Bureau of Standards raised the alarm over an influx of substandard solar and related products in the local market.

“It has come to the notice of Kenya Bureau of Standards that due to the power shortage in the country, there has been an increase in the usage of solar panels. As a result, cases of tampering with the declared output power (wattage) on the solar panels at the points of sale have been reported,” a statement from Kebs says.

The regulator says this malpractice is being done by unscrupulous traders and importers who change the marked wattage on the panel to a higher value. For instance, solar panels of 20W are re-labelled and sold as 40W by changing the initial label.

Kebs says some importers are also sourcing under-rated panels with the intention of passing them off as those of a higher value. The body says its approved solar panels have the power rating clearly indicated either at the back or inside the glass frame in addition to any other markings.

Quality panels are also marked with the Diamond Mark of Quality or the import standardisation mark. Use of under rated panels can result in below performance and inherent failure. “Traders and importers involved in such malpractices are warned that mechanisms are in place to identity and punish those found guilty,” says Kebs.

Possible solution

Solar energy could be a possible solution for rural Africa but the rate at which fake equipment is being brought in has left a lot to be desired. For those who may not be aware, when genuine bulbs are switched on they take about two to three seconds to light up unlike fake ones that do so instantly. Counterfeits’ have a devastating impact on the region’s development and the potential for foreign investment.

“In recent years, East Africa’s business environment has been inundated with an avalanche of counterfeit and pirated products making it extremely unattractive to investors and genuine enterprises,” says a survey titled draft EAC policy on anti-counterfeiting, anti-piracy and other intellectual property rights violations.

Asian countries

Imported counterfeits mostly come from Asian countries such as China, India, Dubai, Indonesia, Thailand and Taiwan, and African nations like Nigeria and South Africa. However, within the East African Community, Uganda, Tanzania and Kenya are also producers. Trade in such products seriously affects the viability of legally registered businesses. It damages the reputation of genuine industries, dilutes their brand value, reduces their market share and brings down their profitability.

Manufacturers spend huge sums of money on research and development of their product, advertising, obtaining licences, paying wages and taxes as well as constructing plants and equipping them. It is estimated that the cost to companies from counterfeiting is as high as $630 billion annually worldwide while imitation products cost the East African region over $500m in lost tax revenue annually.

With the EAC customs union expected to come into effect in January 2010 resulting in the free circulation of goods and people within the region, it is feared that trade in counterfeits could increase. According to most solar companies, water heaters save up to 60 per cent on the electricity bill. On average, the solar hot water installation to cater for a household of up to four people costs about Sh110,000.

The initial costs have, however, been a barrier to many interested in the heaters. Given the initial capital outlay - a minimum of Sh20,000 depending on requirements - retailers undercut most of the bigger players in the industry. Chloride Exide, which controls about 65 per cent of the renewable energy products market, says that with the ongoing green campaign, fake goods are giving them a headache.