Kenya: Electricity access valued, but affordability a challenge

Solar-based off-grid solutions are seen as key drivers for achieving the objective of reaching universal electricity access among Kenya’s population

Kenya accounts for the fastest-growing electrification rates within Sub-Saharan Africa. Despite this, a large share of the country’s rural population remains without electricity.

This is indicated in a study that investigates households’ economic valuation of electricity access in rural regions in Kenya.  The study focuses on factors that determine households’ willing to pay (WTP) for electricity access in rural Kenya and how rural households value the access to electricity via on-grid and off-grid electrification methods. 

The contingent valuation method is employed to obtain national households’ willingness to pay for two electricity access methods: grid connection and off-grid solar-home-system installation.

“The estimated mean WTP for grid connection (∼$78) is almost twice as high as for an off-grid solar-based solution (∼$43). However, the financial viability of obtaining an on-grid connection appears to be limited, especially among low-income groups. 

“The ownership of property and solar lighting devices, self-employment, household expenditures, and preferences for using mobile money services significantly influence households’ WTP for domestic electricity access,” the study concluded.

Rural households in Kenya struggle with electricity access affordability 

The study indicates that the intensification of solar home system (SHS) installation has the potential of providing almost two million households with a connection to electric services in Kenya. 

It shows that solar-based off-grid solutions are seen as key drivers for achieving the objective of reaching universal electricity access among Kenya’s population.

This also shows that there’s a stronger preference for on-grid connection than for off-grid solar home systems.

“Two electrification methods were considered: grid connection and off-grid SHS. The results indicate seven significant determinants of households’ WTP for connecting to electric services. These are bid price, self-employment, household expenditures, preferences for mobile money services, improved housing materials, home ownership, and the utilisation of small-scale solar lighting devices. 

“The access to financial services and the respondents’ educational level depict as important socio-economic factors, positively influencing the WTP for electricity access via an on-grid connection.”

The study indicates that households in rural Kenya value the access to electricity and exhibit a positive WTP for adopting a SHS and connecting to the central grid, respectively. 

“However, the WTP estimates appear insufficient in covering the required installment costs of both electrification methods. The financial feasibility of gaining electricity access is significantly limited among low-income households aiming to connect to the centralised grid.

“Similarly, the initial connection and installation costs are identified as the main barrier for electricity access among rural households.”

Cover photo:  Energy and Petroleum Cabinet Secretary Opiyo Wandayi flagged off the last mile electricity projects at Kayumbani village, Machakos Town Constituency, Machakos County last week. Source: OpiyoWandayi/X