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Kenya celebrates VAT exemption for solar

In September 2013 the Kenyan government introduced a 16% VAT on imported goods to the country, including solar products. As a tax paid by the customer, this pushed up the cost of SunnyMoney solar lights – making them less affordable to low-income Kenyan households.

This week the SunnyMoney team in Kenya are celebrating the government’s decision to make solar products exempt from VAT.As a direct result, the team’s best-selling solar light – the d.light S2 (pictured above) – has already dropped from 1,000 KSH (£7) to 850 KSH (£6). This is a significant price reduction forSunnyMoney customers, 90% of whom live below the poverty line.

Our Operations Director in Kenya, Linda Wamune, explains that:

“Removing VAT on solar products reduces the cost to consumers and aids access to everyone buying solar products. The benefits to Kenyans and the national economy will be substantial. We will be able to reach more customers in off-grid areas throughout Kenya with these price decreases.

This move from the Kenyan government, which was brought to parliament by Suba MP, John Mbadi, is a significant example of how African governments can support renewable energy solutions. It is a story that can be told across the continent toinspire decision-makers about the importance of low-carbon technologies that could bring electricity to the millions currently living without power. The occasion highlights the increasingly important role SolarAid must play in working with policy makers to enable the conditions to build a sustainable solar market.

According to UNEP, Kenyans would save as much as $896 million per annum if the country switched to clean sources of off-grid lighting. SolarAid and SunnyMoney would like to acknowledge the work done by Lighting Africa and KEREA who were both influential in bringing this issue to the attention of the parliament. We look forward to seeing our teams’ solar light sales soar as they bring affordable, safe, bright light to Kenyan families over the coming months.