KenGen to start manufacturing solar power kits as it diversifies revenue streams and supports Kenya’s transition to clean energy

KenGen will soon start manufacturing solar power kits comprising photovoltaic (PV) panels, inverters and battery storage systems to diversify its revenue streams and support Kenya’s shift to affordable energy.

According to the Public Private Partnership (PPP) Directorate, a concept note for the solar project was approved in June and transaction advisors will be recruited by September. The facility to be set up in Olkaria will tap into Kenya’s growing solar power market driven by increasing demand from households and businesses seeking cost effective alternatives to grid electricity.

“The proposed scope includes design, construction and operation of a manufacturing facility that will produce solar photovoltaic (PV) modules and potentially extend into assembly or production of complementary components such as inverters and battery storage systems,” the PPP Directorate stated.

KenGen Eyes Regional Market

The plant will not only serve Kenya’s domestic energy needs but will also target regional markets across East and Central Africa where solar adoption is growing. This will position KenGen to compete with Chinese imports that dominate the African solar products market.

“The facility will serve both domestic and regional markets thus increasing energy access and electrification across East and Central Africa,” reads part of the disclosure.

Kenya’s Solar Boom and Off-Grid Power Demand

Recent data from the Energy and Petroleum Regulatory Authority (EPRA) shows solar PV systems now account for 47.21% of Kenya’s total captive generation capacity which stands at 574.6 MW. Captive power refers to electricity generated for private consumption and not for feeding into the national grid.

With frequent blackouts and rising electricity bills from Kenya Power, many homes and businesses are turning to solar energy for reliability and lower operating costs.

KenGen’s New Business Model

KenGen currently earns the bulk of its income—Sh41.25 billion of its Sh56.29 billion revenue in the financial year ending June 2024—from selling electricity to Kenya Power. But the company is pursuing alternative revenue streams. These include:

  • Sale of carbon credits expected to fetch $32.05 million (Sh4.14 billion) from 4.62 million Certified Emission Reductions* Geothermal well drilling services, having earned over Sh8 billion from projects in Ethiopia and Djibouti and expanding into Tanzania and Eswatini

  • Construction of its first solar power plant at Seven Forks with a capacity of 42.5 MW

Why Local Solar Manufacturing Matters

KenGen’s move is part of a national push for renewable energy solutions as Kenya works towards its climate goals and reduces dependence on fossil fuels. By manufacturing solar kits locally:

  • Consumers will have more affordable and customised solar products

  • The country will reduce dependence on foreign imports

  • Local manufacturing will create jobs and technology transfer

Outlook

The solar manufacturing plant is a big deal for Kenya’s renewable energy sector and a game changer for KenGen’s long term strategy.