Kenya has ideal conditions to develop a promising solar water heater market. As an equatorial country, Kenya receives a lot of solar radiation, making it ideal for the development of solar water heaters (SWH). It is estimated that 77,000 SWH units were installed in Kenya in 2017, but the potential market for SWH units in Kenya is believed to be around 3.5 million units. This means that the current market is only operating at around 2.6% of its full potential.
While the government has no formal targets for SWH, there is a draft energy bill that aims to promote the widespread use of renewable energy. Despite the lack of government targets, SWH systems are currently exempt from VAT, which is a great benefit to the SWH market. The government does not offer specific loan programs to SWH suppliers, but there are some partnerships between financial institutions and national SWH distributors.
As Kenya is an equatorial country with abundant sunshine, it is an ideal destination for solar water heaters. However, the current market penetration rate, a metric that compares the total installed capacity of solar water heaters in operation per thousand inhabitants, is quite low. The best available data on the growth of the solar water heater market is from the International Energy Agency (IEA) for Sub-Saharan Africa from 2012 to 2017. This value is 11%, which is a high level of growth for the solar water heater market.
Finally, the business environment considers the ease of doing business and the infrastructure for the solar water heater business. The World Bank subsidiary Doing Business program assesses countries on business regulations and their enforcement. Kenya scores highly in this indicator, ranking 56th out of 190 countries.
Kenya has one of the most promising solar water heater markets in East Africa. The solar water heater market is greatly helped by the implemented building regulations, which greatly encourages the implementation of solar water heaters in new buildings and extensions of existing buildings. In addition, the VAT exemption on solar water heater equipment facilitates the import and export of any components and equipment related to solar water heaters.
