For the first time in Kenya, those who generate power for their own use but also have a connection to the national electricity grid can now sell their excess generation to the entire country through a concept known as net metering.
A system that allows consumers who produce their own energy to supply electricity to the national grid during times of overproduction and receive compensation for the energy sent.
The scheme became a reality in June when then-Energy and Petroleum Minister Davis Chirchir issued the Energy (Net Metering) Regulations 2024, ending years of delays in enacting the regulations.
How does net metering work?
Net metering is simply a new way for people to store their excess electricity in their country’s electricity grid instead of buying expensive battery systems.
For example, if a residential customer has a solar system on their roof, that system may generate more electricity than the home uses during the day. If the home uses net metering, the meter will work in reverse to provide credit for electricity used at night or during other times when the home’s electricity usage exceeds the system’s output.
In this arrangement, customers are only billed for their “net” energy usage.
Who can benefit from net metering?
Any energy consumer who is connected to the grid and also generates energy for his own use can apply for net metering.
However, they can only qualify if they generate electricity from renewable sources such as solar, small hydro, and wind power.
If you are a single-phase residential consumer, the capacity limit for your net metering connection is 4kW. For three-phase consumers, the limit is 10kW. Meanwhile, commercial and industrial consumers can supply up to 1MW to the grid through the scheme.
How do you apply for net metering?
A person intending to enter into a net metering agreement shall apply to Kenya Power or the relevant retailer. Upon approval, the consumer shall enter into a net metering agreement and install and commission the meter within six months from the date of the agreement.
The consumer is responsible for installing, operating and connecting the meter to the Kenya Power Company network at his own expense. The net metering license will be valid for 5 years.
On what basis will applications be approved?
Net metering applications will be granted on a first come, first served basis. The Energy and Petroleum Regulatory Authority (EPRA) will only license a total capacity of 100MW in the first five years of the net metering scheme. This means that once approved applications reach a total capacity of 100MW, EPRA will stop issuing new net metering licenses.
Will you be paid cash for providing energy to the grid?
No. Kenya Power will not pay consumers for the power they purchase from them under the net metering scheme. Instead, it will give consumers a supply credit of half the cost at which consumers purchase electricity from Kenya Power.
For example, if Kenya Power sells a unit of electricity to a consumer at Sh32, the company will give the consumer a credit of Sh16 for each unit it supplies to the grid.
This credit will be used to settle any future bills that the consumer may incur in the future. However, the credits expire at the end of Kenya Power’s financial year on 30th June of each year.
At the same time, consumers are entitled to receive the value of any carbon credits accrued from net metering systems.
Which countries have implemented net metering?
Net metering is already being implemented in a number of countries around the world, while other countries have already put in place the necessary legislation to implement the system.
High-income countries that have implemented net metering are Barbados, Belgium, Denmark, Italy, Malta and Chile. Upper-middle-income countries that have implemented net metering are Brazil, Dominican Republic, Jordan and Tunisia.
Among lower-middle-income countries, Guatemala, Pakistan, the Philippines and Sri Lanka are among those implementing net metering, while Ghana, Kenya and Senegal are among those piloting and establishing the system.