Kenya promotes clean energy with special billing system

Kenya recently took a significant step towards a cleaner energy future by announcing net accounting rules. This policy change aims to increase the uptake of renewable energy in households by making net accounting easier. This scheme is particularly important as Kenya and many other countries strive to achieve ambitious renewable energy targets. Following the COP28 commitment to triple renewable energy production by 2030, finding solutions such as net accounting is key to achieving these goals.

Net metering is a billing mechanism that allows consumers who generate electricity from renewable sources, such as solar panels, to actively participate in the power grid. A net meter tracks the flow of electricity to and from your property. During periods of high solar production, when your panels generate more electricity than you use, the excess energy is returned to the grid. The net meter then records this “exported” electricity on your account.

Conversely, when your solar generation is not meeting your needs, you draw electricity from the grid. At the end of the billing cycle, you pay only for the net amount of electricity you used from the grid, minus the credits you earned for feeding energy back into the system.

Net metering offers a win-win situation for consumers and the environment. It accelerates the transition to a clean energy economy by providing homeowners and businesses with financial incentives to invest in renewable energy technologies.

A recent study by Lawrence Berkeley National Laboratory found that net metering programs in the United States were associated with significant increases in solar power. This increase resulted in increased solar energy production, which led to reduced greenhouse gas emissions.

The benefits of net metering go beyond environmental benefits. Solar energy acts as a diversifying force in the electricity grid, reducing reliance on traditional, often peaking power plants. This can contribute to lower electricity costs. The growing solar industry also creates new jobs in installation, maintenance and manufacturing, boosting the local economy.

However, net metering has its drawbacks. The system can lead to cost-shifting, where non-solar customers pay the costs of those who have invested in solar panels. That’s because net metering programs typically require utilities to charge solar customers the full retail rate for the electricity they generate, even though the utility can buy electricity from wholesale markets at a lower rate.

It could also reduce utility revenues, which could make grid maintenance and upgrade investments more difficult. Finally, the upfront costs associated with installing solar panels could pose a barrier to entry for low-income households, potentially exacerbating existing inequalities in the electricity sector.

Therefore, it is crucial to design net metering programs that address these potential shortcomings. For example, implementing tiered crediting systems in which the rate at which solar customers are compensated for excess electricity varies depending on the time of day, can help alleviate concerns about cost-passing.

Considering financial assistance programs for low-income households can ensure equitable access to net settlement benefits.

Net metering remains a cornerstone of a renewable energy future. By recognizing and addressing potential shortcomings, Kenya and other countries can leverage this system to pave the way for a more sustainable energy future. Empowering consumers and supporting innovation in the renewable energy sector will drive this transformation.