Assessing Photovoltaic Solar Energy Financing Models And Sustainable Energy Transition In Ngaciuma-Kinyaritha Subcatchment, Kenya

ABSTRACT

Solar energy is deemed the single energy resource that is continuously decreasing in price (by 75%), increasing in utility and could effectively contribute to sustainable watershed management. In Kenya, there is an observed acceptance of Photovoltaic (PV) Solar Home Systems (SHS) as the best-fit form of energy to meet rural energy demand. This could potentially displace rural predisposition to woodfuels and paraffin and cumulatively, reduce environmental vulnerability. Photovoltaic SHS are nonetheless challenged mainly by the initial capital cost disbursement, globally and in Ngaciuma- Kinyaritha sub-catchment, Kenya. The focus of this study was to evaluate the economic and environmental significance of different solar energy financing models. It also aimed to analyse different scenarios in order to determine the most cost effective, most sustainable and best-fit financing models that together overcome the capital up-front of solar energy accessing in Ngaciuma-Kinyaritha sub-catchment. In achieving the stated objective, the study adopted and adapted interplay of quantitative and qualitative tools of data collection and methods of data analysis to establish the relationship between energy use and environmental degradation and the ability of households to transition into solar energy use. The study made use of empirical survey instruments including: structured questionnaires (100 cases - using households as a sampling unit), Focused Group Discussions (in the upper, middle and lower zones of the sub-catchment) and interview guides for three selected institutions. The analysis of data followed an objective-based approach in order to emphasize the field observation under each key objective. In analysing the field data, the study made use of simple analytical tools comprising: descriptive statistics (frequencies, percentages and means), chi square analysis, cost benefit analysis, PESTELI analysis, scenario analysis and data triangulation. Using cost benefit analysis, the study perceived a payback period of 6years for SHS that are 50watts and a life payback of 8,685Ksh. It also recorded a payback period of 8years for systems that range between 200wats and 1kilowatts and a life payback of about 100,000Ksh. On the average, the ability to pay for SHS under the cash sale financing model, third party credits model and the solar developer model was observed to be 200Ksh. Using scenario analysis, the study indicates that willingness and ability to pay for multiple utility SHS under the solar developer model is relatively higher than the cash sale model which is the observed status quo in the study area. In a PESTELI analysis, the study perceived a tenable potential in rural energy supply and recommended that an energy user remodelling should be undertaken by the Kenya’s energy ministry to foster energy transformation in Ngaciuma-Kinyaritha sub-catchment. It also recommended that the Ministry of energy (MOE) in collaboration with Global Village Energy Partnership (GVEP) could pilot alternative capacity building scenarios in rural energy use. Finally it gives specific strategies which could be used to improve upon sustainable energy use in Ngaciuma-Kinyaritha Sub-catchment and across the developing world.