US solar manufacturer partners with Enamax to enter Kenya

From the newsletter

Energy America, a US-based solar module manufacturer, has partnered with Enamax, a renewable energy company in Kenya, to advance solar solutions in Kenya and Africa. Their target market will be utility-scale solar projects, commercial and industrial installations, and rural electrification programmes where demand is growing fast.

• Their market entry comes at a time when China has scaled up operations in Africa. In 2024, it exported 11,360 MW of solar panels, up 43% from 2023 exports.

• The partnership will leverage project financing opportunities through the Export-Import Bank of the United States (Exim Bank), to ensure its scalability and long-term sustainability.

More details

• The demand for solar energy in Africa is projected to grow at a Compound Annual Growth Rate (CAGR) of 9% between 2025 and 2031. The commercial and industrial sector is expected to account for a bigger share of this demand. Across Africa, this sector has led in the adoption of solar, with South Africa leading, mainly due to their grid challenges.

• Kenya has been the gateway to the East African market, with many solar companies first setting up their offices in Kenya before expanding to East Africa. Energy America seems to be following the same script. Kenya is more advanced in the policy and regulatory space, which has pushed the demand for solar higher, especially in the commercial and industrial sectors. Heavy residential consumers are also opting for solar. This week, one of Kenya's largest malls, Two Rivers Mall, announced plans to install 2 MW of solar for the mall's commercial use and also its residential consumers.

• Many energy companies from China have entered the Kenyan market, right from the time the market was still nascent in the early 2000s. The most recent one is Neosun Energy which entered Kenya last month, targeting commercial, industrial and residential customers.

• According to the IEA, Chinese solar products have dominated the global market and account for about 80% of total exports. They have long received government support, including financing from banks and incentives for overseas investment. This has given them a competitive edge in securing large-scale projects. American companies, while receiving some government support, may not have the same level of backing as their Chinese counterparts.

• The Chinese long-term presence in Africa has enabled them to forge local partnerships. JinkoSolar and JA Solar have been directly inking deals with governments and project developers to supply their solar panels. This way they cut the supply chain and deliver panels cheaply without middlemen. This strong supply chain has taken time to build, and American solar companies may take time to replicate it.

• By partnering with a local player, Energy America stands to gain a better understanding of the Kenyan market. This way they can design appropriate and customised solutions for Kenya. Enamax has experience in this space, having handled over 250 projects across Africa. This would provide Energy America with the necessary market intelligence to kickstart its operations.

Our take

• The entrance of Energy America into the Kenyan market is expected to increase competition. The African market is price-sensitive, and those companies that can offer lower prices stand out. But price won't be the only thing to compete on. Technology suitability for the local market will be key. Chinese companies have a long presence in Africa and understand what solar models work best in Africa. Their TOPCon solar panels, for example, are designed to work efficiently even in hot desert climates.

• Establishing a strong supply chain that can deliver products on time is important for projects with strict timelines and also for markets that frequently change their import regulations. China stands out. They have a presence in almost all 54 countries in Africa. American companies, though present in a few countries, lack a strong supply chain that can outcompete China.

• The Americans, though, have been keen to revive their global influence and would be willing to bet big on solar technology. In Kenya, they are back, financing one of Kenya's single largest road infrastructure projects. This could be a signal. The plan of utilising their Export-Import Bank will be key in providing the necessary financing for big projects. Without a doubt, consumers are expected to benefit from the competition – more options, more choices.