Equity, Indian firm in pact to offer low interest loans to solar equipment buyers

Equity Bank has partnered with an Indian solar energy firm to advance buyers of its equipment loans at interest rates of as low as eight per cent.

The lender said that the deal with Orb Energy is meant to trigger uptake of solar water heating equipment, solar lamps, solar powered TV and solar panels.

Interest on the loans that target homes, retail and businesses will range from between eight per cent to 21 per cent.

“We are keen to boost uptake of renewable energy among homes, industries and businesses, hence this arrangement with Orb Energy,” Equity director of operations and customer experience Gerald Warui said Monday during the signing ceremony in Nairobi.

Solar experts reckon that Kenya, like most African nations, has a high yield of solar energy due to high radiation levels from the sun.
The sun’s light intensity, not heat levels determines solar electricity yield.

Telecommunications giant Safaricom last week strengthened its partnership with solar energy provider M-Kopa to supply one million off-grid households in the country with solar-powered digital flat screen television sets by next year.

The deal comes with a 16-inch TV, a radio, solar panel, aerial, two head lights and a torch. Customers who buy M-kopa’s kit are required to make a Sh7,999 deposit through mobile money service M-Pesa and a subsequent Sh125 daily for a year. Upfront payment is Sh45,000.

READ: M-Kopa targets one million buyers of Sh45,000 solar TVs

The Orb’s solar powered kit is Sh59,990 with an option of making weekly instalment of Sh725.

Orb chief executive Damian Miller said the firm plans to double its branches to eight across the country from the current four in Kisumu, Nakuru, Thika and Eldoret after securing $2 million (Sh204 million) from the Dutch government.

Its Nairobi office currently serves as the African headquarters.

The firm’s water heating equipment costs Sh80,000 for a150 litre system and Sh150,000 for 300 litres, excluding installation fees.

The Energy (Solar Water Heating) Regulations 2012 require builders of residential and commercial houses whose hot water needs exceed 100 litres per day to include solar water heating systems in their designs.

The Energy Regulatory Commission, which drafted the rules, reckons that only a small fraction of properties built over the past three years have complied with the guidelines.

Defaulters of the rules face jail terms or fines of up to Sh1 million.

The energy regulator says the solar kits will help conserve energy by up to 20 per cent and lower demand for electricity as increased economic activity and connection of more homes to the grid puts pressure on exiting electricity generation plants.

But property developers have in the past cited prohibitive costs of solar heaters as a deterrent to increased uptake, which Equity Bank is riding on to grow its loans book.