alexa Corporates now bet big on solar to power their businesses into healthy margins - Daily Nation

Corporates now bet big on solar to power their businesses into healthy margins

Tuesday December 11 2018

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More companies are turning to solar photovoltaic (PV) grid-tied systems to supply power for internal use to ensure reliable supply and reduced operational costs.

Kapa Oil Refineries Ltd has become among the latest firms to express interest in this project. It wants to install a 1.5 megawatts (MW) PV grid-tied system for internal use, joining the growing list of corporates turning to green energy to fuel industries.

Last month, the firm made an application to the Energy Regulatory Commission (ERC) seeking for a permit to begin the installation work that will see it save millions of shillings in power costs in future.

A year ago, the ERC issued energy management compliance certificates to Kapa for implementing energy management practices that support cost reduction.

The increased attention of corporates towards green energy is in line with the country’s ambition to attain 100 per cent green energy sufficiency by 2020, a target president Uhuru Kenyatta says the country must to meet.

“We have to use renewable sources of energy to protect our environment, and ensure that we pass down, to our sons and daughters, a country as clean and green as we inherited from our fathers,” said the President.

Kapa’s decision followed that of flower grower and exporter, Oserian Development Company in March. Oserian applied to ERC for variation of its 2MW geothermal power generation licence to include harnessing of solar energy.

The firm, which uses geothermal steam to power business — from lighting hundreds of staff houses to heating its greenhouses at night — wants to utilise roofs for laying solar panels. The move will deepen is reliance on green energy.

In September, Solarcentury East Africa installed a 506 kilowattpeak (kWp) hybrid solar PV plant at Africa Logistics Properties (ALP). The logistics firm said the installation will help it save Sh12 million per year.

Diesel generators

The solar system, which consists of 1,840 solar PV panels and ten solar PV inverters, is expected to generate 800,000 kilowatts per hour annually, reducing ALP’s reliance on the energy from the grid and diesel generators.

The same month has seen the International Centre of Insect Physiology and Ecology (Icipe) officially commission its $2.5 million (Sh256 million) two solar PV power plants located in Kasarani, Nairobi, and on the shores of Lake Victoria.

The plants have a combined generating capacity of 1,156 kWp.

“Icipe now has a sustainable energy supply as well as reduced diesel fuel dependency. Importantly, as a result of this system, it will be able to offset an average of over 400 tonnes of carbon annually,” said Icipe.

Solarcentury is also set to install a 500kW solar PV system at Moi International Airport in Mombasa. The ground-mounted solar system is expected to generate 820,000 kWh per year and offset 1,300 tonnes of carbon dioxide annually

The firm had also helped Garden City Mall set up a $1.9 million (Sh194.5 million) solar carport to generate 1,256MW hours annually from the 3,300 solar panels installed on the topmost car park shade.

The mall’s management said this would help it cut power bills by about Sh31.6 million annually.

The government scrapped duty on imported solar equipment to spur investors in the sector. This has seen corporates ride on this to connect power for own use as well as supply to the grid.

London Distillers Ltd also installed 1 MWp roof solar system in Athi River, helping it offset the need for grid energy.

At the time of installation, it said the system would enable it to save at least Sh18.4 million per year for at least 25 years, the lifetime of the system.

Williamson Tea, also cut the ribbon on a 1MW solar farm in Changoi. It said that this was to help cut its energy bills by nearly one third.

Last year in December, Kenyatta University switched on the first phase of a Sh1.7 billion solar plant that will see the institution generate its own electricity and offload excess power to the national grid.

The 100 kilowatt (kW) solar plant, located at main the campus off Thika Road cost about Sh17 million. It was developed by France-based solar panels manufacturer Urbasolar.

This follows in the footsteps of Strathmore University, which in 2014 installed 600kW rooftop PV solar plant, part of which is also being sold to the national grid. According to the university, the monetary savings for the project are estimated at between Sh18 million and Sh24 million per year.

With firms now able to generate excess power, attention is turning to selling excess units to the national grid.

Energy Bill which underwent first reading in November 2017, proposes licensing of more electricity distributors and retailers in a bid to open up the market and end State-controlled Kenya Power’s near-monopoly status.

High costs

The ERC says it wants to set up a fund to cushion operators of mini-grids from high costs as part of regulations to encourage investors to generate, transmit and sell electricity in remote areas at affordable retail prices.

This offers corporates an opportunity to not only save costs by eliminating electricity bills but also generating revenue by selling excess electricity.

Kenya has one of the most active commercial PV system market in Sub-Saharan Africa, according to the Kenya Renewable Energy Association (Kerea) which brings together key players in renewable energy space.

Kerea says that an estimated 300,000 rural households in Kenya have solar home systems and annual PV sales in Kenya are between 10,000 and 20,000 systems.