Techno-Economic Assessment on the Feasibility of Solar Photovoltaic Systems for Tea Production in Kenya

Sammanfattning

The tea sector is one of Kenya's most important industries, with a big impact on the country's economy and socio-economic development. At the same time, tea manufacturing is highly energy-intensive and strongly affected by electricity tariffs and high production costs. Due to the favorable weather conditions and growing renewable energy ambitions in Kenya, Solar Photovoltaic (PV) systems present a potential opportunity for a more cost-efficient tea production process. The aim of this study was to assess the techno-economic feasibility of solar PV for tea manufacturing in Kenya. The study was conducted in collaboration with PV system supplier Miale Solar and combines qualitative field-based insights from stakeholders in the Kenyan tea- and energy sectors with a Techno-Economic Analysis (TEA). The analysis included both the supplier perspective through Miale Solar, and a customer perspective focused on medium-sized tea factories managed by Kenya Tea Development Agency (KTDA). Several grid-tied PV systems with and without Battery Energy Storage Systems (BESS) were assessed and evaluated. The study is based on a mixed-methods approach including interviews, observations, simulations and financial calculations. The technical assessment evaluate solar resource availability and its alignment with the tea factory load profile while the financial analysis includes Levelized Cost of Energy (LCOE), Average Electricity Price (AEP), Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PP), and Profit Margin (PM). The results from the study indicate that solar PV systems have strong technical potential within the Kenyan tea sector, but that solar energy systems without storage cannot fully support the manufacturing process since large parts of electricity consumption occurs outside of daylight hours. Moreover, BESS was found necessary to ensure improvements in reliability and energy security. The financial analysis shows that grid-tied PV systems contributed to reduced electricity costs, but to which degree is highly dependent on whether surplus electricity can create value or not. Current regulatory conditions make utilization of excess energy through Net Metering difficult, and while BESS contributes to higher utilization and improved energy security, systems without storage solutions were generally found to be more financially viable due to lower investment cost. Overall, the study concludes that solar PV systems can contribute to a more cost-efficient tea industry in Kenya, but that feasibility remains dependent on system design, financing structures, and regulatory conditions.