Solar energy producers to ink PPAs in new rules

Solar power. FILE PHOTO | NMG

Homeowners and businesses producing more than one megawatt of electricity from solar will be required to sign Power Purchase Agreements (PPAs) with Kenya Power as the country gears for increased generation of renewable electricity.

The requirement is contained in the Net-Metering Regulations 2022 that have been opened up for public scrutiny before the Energy ministry finalises them.

Under the requirements, clean power homeowners and businesses generate has been capped at one megawatt of power. The producers will be allowed to sell electricity to other consumers on a first-come-first-serve basis.

But those producing more than one megawatt will be compelled to sign PPAs with Kenya Power to ensure fixed and predictable tariffs.

The proposal comes amid an increasing shift in the number of homes and businesses that are switching to renewable electricity, especially solar in a bid to have a reliable supply.

ā€œThe regulations are meant to avoid cases where people producing over one megawatt want to sell electricity to Kenya Power at rates higher than those contained under a typical PPA,ā€ said an official from Kenya Power.

A typical PPA contains rates at which producers sell power to the State electricity distributors meaning that homes and businesses will supply the excess electricity to Kenya Power at fixed charges.

Large businesses and homeowners have over the past two years stepped up the shift to own-power production mainly with solar and biofuels in a move to provide affordable and reliable electricity.

The shift is also presenting a scenario where prosumers (producers and consumers of power) are generating surplus power that can now be sold to other users.

A net-metering arrangement allows a home or business to generate power for internal consumption and sell the excess to the national grid, which in this case is Kenya Power.

The regulations will bind power generated from solar, geothermal, small hydropower, biogas and biomass among other clean sources.

ā€œAll tariff applications, adjudications, and revisions will be conducted in line with the standard procedures of the Authority,ā€ reads the regulations.

Homes and businesses generating clean power for internal use and sale must be licensed by the Energy and Petroleum Regulatory Authority.

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