Solar vendors under their umbrella body the Uganda Solar Energy Association (USEA) have asked the government to set up the Uganda Solar Energy Investment Revolving Fund arguing that it’s the only way that will bring down the cost of solar equipment in Uganda.
Industry Investment Resources

Solar Vendors push for revolving fund to bring down cost

Solar vendors under their umbrella body the Uganda Solar Energy Association (USEA) have asked the government to set up the Uganda Solar Energy Investment Revolving Fund arguing that it’s the only way that will bring down the cost of solar equipment in Uganda.

The Association Chairman Emmy Kimbowa said in Kampala during the launch of an interactive website aimed at boosting solar energy uptake in Uganda that despite the government’s waiving of taxes on solar panels during the reading of the National Budget, that has not transformed to price reduction in the purchase of especially other solar equipment.

“When the government waived taxes on solar panels, they forgot to waive taxes on other solar equipment and accessories. For example, Solar inverters and batteries still attract taxes. The Solar Powered Refrigerators, Solar fridges, Solar irons, solar bulbs, Solar heaters etc all still attract taxes. This makes uptake a big challenge,” said Kimbowa.

He added that even the World Bank grant aimed at helping the deeper penetration and use of Solar Energy has not helped much.

Kimbowa said that the grant facility in Banks like Stanbic, DFCU and Centenary Bank doesn’t allow consumers to borrow and empower them financially to be able to buy the equipment but it only caters for vendors who are importing the equipment into the country.

“When you import solar equipment and there is no one to buy it or there is lack of effective demand, what do you do? Its why we are pushing for the Uganda Solar Investment Revolving Fund that we think will help us solve this problem,” he said.

Dr Sheila Desai, Director for Economic Growth, USAID Uganda who was the Chief Guest said that access to cleaner and productive energy is critical for addressing poverty and economic development in Uganda.

It aims at reaching thousands of rural Ugandans with cleaner and productive electricity as part of efforts to enable Uganda to achieve goal seven of the United Nations Sustainable Development Goals on access to energy for all by 2030.

“Solar energy has the potential to meet the energy needs of Ugandans including women and girls especially those in rural areas. With solar energy, communities power irrigation systems; communities can store medicine in rural health centres; and communities can improve the quality of education children receive,” said Dr Desai.

“This, however, must be achieved with the support of policy interventions in addition to ICT and digital transformation efforts that culminate into the much-needed cost reductions to enhance cost-effective service delivery,” she explained.

“A critical part of USEA’s work is communication and advocacy. As an industry body, USEA is responsible for advocating to key stakeholders such as consumers and policymakers, about key issues related to the solar sector for instance on how to purchase quality solar products and support on tax-related issues on behalf of its members to advance the industry,” said USEA’s Chief Executive Officer Joyce Nkuyahaga during the USAID Power Africa sponsored website launch.

She said the website and online platform will serve as a knowledge hub for USEA’s members and others key stakeholders interested in the solar sector, the opportunities and financial resources related to the solar energy sector in Uganda.

Power Africa is a US government led partnership that brings together technical capacities, capabilities, resources and programs of 12 US government Departments and Agencies and 16 international Development partners to provide market-driven solutions to advance the goals of the Electrify Africa Act of 2015 to catalyze growth of small business, the power industry and bring electricity to millions of people for the first time.

According to a study on the use and Viability of Solar Energy in Uganda by the National Association of Professional Environmentalists, 88% of Ugandans use kerosene for lighting and 79% use firewood for cooking while only 1% use solar energy for the two purposes.

The heavy reliance on biomass by the country as a source of energy in a day to day life puts the country at risk of environmental degradation and climate change.

Furthermore, statistics show that Uganda’s electricity access currently stands at about 20% with 90% of the population still dependent on biomass.

More so about 78% of Ugandans are not connected to the national grid. Important to note is that existing solar energy data clearly indicates that the solar energy resource in Uganda is high throughout the year and has the potential to meet the energy needs of Ugandans.

However, the scale at which solar energy is being used for productive purposes in Uganda is still very small because of a number of constraints notably; lack of investment finance and adequate knowledge among others.

USEA, the umbrella body for the solar energy industry in Uganda is working with several partners including; UNCDF, USAID, UKAID, WORLD BANK and the Government of Uganda to increase the uptake of solar products, promote better regulation and good business in the industry.