Kerosene not only depletes Kenya foreign currency reserves — draining 600 million dollars every year in import costs but is also polluting to the environment and the users.
Although Kenya has accelerated rural electrification efforts in the recent past, the economic growth of the last 10 years has improved incomes even in the rural areas raising people’s consumption and lifestyle preference trends with shift to solar lighting and mains electricity being preferred for lighting over the traditional use of kerosene.
When James Kaburu imported his first batch of 1,000 pieces of solar bulbs in January this year from the United States, he was prepared to hold the stock for even up to six months, but in three weeks time, he was placing another order for similar amount of bulbs.
“It started out as a joke. An American solar bulb inventor was profiled in the local newspaper, I contacted his company to try market the niche product but did not realize that the demand was too high,” said Kaburu, who is in business of general supplies to institutions across East Africa.
A change in the American company’s policy that it could only sell minimum of a container load of bulbs, however, knocked out Kaburu from the business as he could not raise the capital required to buy that quantity.
“The company could not give me the bulbs on credit and it has been difficult to raise a credit facility with the banks here,” said Kaburu.
Today, he is undaunted with inquiries from distributors he worked within the three months he was in that business, but he will need to wait to get more enough capital.
Kenya, as the case of Kaburu, indicates a market starved off quality solar products. The local solar equipment vendor, Davis and Shirtliff recently reported almost doubling sales of solar water heating equipment in 2011.
Part of the driver of growth especially on the heating systems is the regulations for residential and commercial buildings that require buildings that need more than 100 litres of hot water a day to incorporate a solar hot water system.
Kenya has also removed import tax on solar equipment making them cheaper.
The International Finance Corporation (IFC) which runs the Lighting Africa project in Kenya and Ghana indicates solar lighting equipment market is growing very fast in Kenya.
The growth is being attributed to demand by rural communities that have not been connected to the national grind electricity or not served by the numerous community owned mini-hydro generation projects especially in the Kenyan highlands.
“Lighting Africa market reports have documented tremendous growth, an average of 75–85 percent per year in the Kenyan market for modern off-grid lighting products over the last two years. Consumer surveys undertaken this year are revealing distinctly evolving consumer preferences, now more rural families would like to light up their entire homes, not just one room at a time, using solar home lighting systems,” notes a consumer report released by Lighting Africa on Friday.
The latest survey by Lighting Africa found that most consumers see hire purchase as the best option for acquiring these multi- room home lighting systems, and expressed a desire for hire purchase arrangements with dealers and retailers in their respective home areas.
The hire-purchase arrangement are possible even in the unformalized market of the rural areas because of the existing culture of group savings or microfinance schemes that enable vendors to penetrate such groups that guarantee each other when they buy such equipment on credit.
Kenya has more than 20 quality-tested solar lighting products retailing country-wide. Most of these are versatile portable single solar lamps that easily double up as torches, and can be used in a number of ways such as desk or study lamps, or they can be hung on ceilings or walls to light entire rooms.
According to the IFC, the survey also found that consumers prefer lighting products that can provide more than just lighting, solar lighting kits that can also charge mobile phones are rated highly by consumers.
The new finding on solar equipment market in Africa tally with the government policy of to completely phase out kerosene for lighting and cooking and replace it with clean energy products such as solar lighting kits.