Why cheap renewable power is still expensive in Kenya
High costs constrain manufacturing, undermine competitiveness, and burden low-income households most.
What you need to know:
- Much of the problem lies in institutional structure and decision-making. Kenya has strong laws and policy frameworks on paper.
- In practice, however, implementation is undercut by limited resources, political interests, and inconsistent execution.
Kenya has achieved what few nations have: a power system anchored in renewable energy, with geothermal, wind, and hydropower forming the backbone of its grid.
Yet for many households and manufacturers, this green transition has failed to deliver affordable power, greater equity, or poverty reduction. Instead, the gap between Kenya’s energy ambitions, its climate goals, and citizens' daily needs continues to widen.
This paradox has consequences. Affordable electricity is essential for household well-being, industrial growth, and jobs. High costs constrain manufacturing, undermine competitiveness, and burden low-income households most. When clean energy fails to deliver tangible benefits, public trust in the entire transition weakens.
Recent research by the Stockholm Environment Institute highlights persistent disconnects between climate action, energy planning, and equity goals in the country. Kenya
Vision 2030, for example, prioritises manufacturing and industrialisation to create jobs, yet emissions from these sectors threaten the commitment to cut emissions 32 per cent by 2030. Without better coordination, gains in one area could undercut another.
Much of the problem lies in institutional structure and decision-making. Kenya has strong laws and policy frameworks on paper. In practice, however, implementation is undercut by limited resources, political interests, and inconsistent execution. Ministries responsible for energy, environment, social protection, and industrialisation often work in parallel, not partnership, pulling policy in opposing directions.
The research traces these challenges to three interlinked causes: institutional barriers, political interests, and power dynamics within the electricity market.Institutional barriers.
Many of the measures needed to support a just transition remain chronically underfunded. Budget releases are frequently delayed, stalling essential interventions before they begin. Rising public debt and competing demands on the Treasury mean social and equity-focused programmes are often the first to face cuts despite their role in ensuring clean energy benefits reach ordinary Kenyans.
In some cases, resources intended for social protection and local development never reach the communities they are meant for. Stakeholders consulted in the study pointed to procurement lapses, system losses, and inefficiencies in electricity connections. These failures raise costs for consumers, erode public trust, and slow the transition.
Political interests
Political dynamics also shape Kenya's energy path. Until recently, coal featured prominently in national development plans, with major projects proposed in Lamu and Kitui counties, but they have since been suspended following strong community opposition, environmental concerns, and a global shift away from coal financing.
Also read: Solar: The invisible burden of going green
Local community organisations and environmental groups were critical in challenging these projects and advocating for more equitable decision-making. While this demonstrates the power of public engagement, participation across the energy sector remains inconsistent. Women, youth, and informal workers are still routinely excluded from energy planning. Too often, public participation is treated as a procedural box to tick, not a meaningful dialogue, leaving communities disconnected from national plans and increasing the risk of conflict.
Power dynamics in the electricity market
Kenya's electricity market structure further complicates efforts to cut costs. Kenya Power remains the sole distributor, maintaining a monopoly even as private producers supply the grid. Ageing infrastructure, high technical losses, and inflexible long-term contracts all constrain its ability to deliver affordable electricity.
Independent power producers, particularly thermal generators, operate under contracts that guarantee payment even when no electricity is generated. These costs are ultimately passed on to consumers. As a result, the expansion of renewable energy has not automatically translated into lower tariffs.
Meanwhile, the social impacts of the transition are often overlooked. Workers whose livelihoods depend on fossil-fuel-related activities —charcoal traders, kerosene sellers, small fuel vendors, and petrol station attendants — face uncertain futures in a cleaner energy system. Few policies adequately address how these workers will be supported as the transition accelerates.
Aligning affordability, climate and equity goals
Kenya’s renewable energy expansion risks becoming self-defeating if electricity remains expensive and inaccessible for most people. Placing affordability at the centre of the transition is essential. This requires targeted support for low-income households, sustained investment in grid reliability to reduce losses, and stronger alignment between industrial policy and climate commitments.
Improved social protection can help households and workers adapt to cleaner technologies, while genuine community engagement can build trust and reduce resistance to change. Without addressing inefficiencies, poor coordination, and political interests within the electricity sector, Kenya risks achieving its global climate goals while entrenching domestic inequalities.
A just transition must be measured not only by megawatts added to the grid, but by whether it improves lives, creates decent jobs, and makes electricity truly affordable for all Kenyans.
Muhoza is the cluster lead for Inclusive, Healthy and Sustainable Cities at Stockholm Environment Institute Africa Centre
