Rwanda boasts abundant sunlight, wind, and geothermal resources, but like many African nations, faces hurdles in harnessing clean energy.

Industry players say scaling up renewable energy utilisation is limited by challenges of infrastructure, such as limited grid reach to remote areas and insufficient battery storage for intermittent energy.

According to the International Renewable Energy Agency, Rwanda had about 25 megawatts of deployed solar at the end of 2023, the same figure recorded in the last five years.

ALSO READ: What next after Norwegian energy developer exits Rwandan market

Henry Nyakarundi, the brain behind African Renewable Energy Development (ARED), suggests that the current regulation makes it hard for investors in renewable energy to deploy and scale their investments.

"An investor can only invest where the government tells them to. They have to authorise you to invest in a certain place,” he explains, pointing out that, for instance, the government will "advise” investors to scale up solutions in rural areas, which not only requires more capital but also has a low-profit margin.

The problem, he says, is that the government is the regulator and at the same time a player in the same sector, which makes it a tough business when you have to compete with the government.

"Deregulation of the sector means opening up the market to allow investors the luxury of investing in urban residential homes, and factories, among other places,” he argues.

Currently, homeowners seeking to install solar power systems face regulatory barriers. The Rwanda Energy Group's exclusive rights to grid connection impede the development of a competitive market for solar energy.

"This is not competitive,” Nyakurundi argues.

ALSO READ: Renewable energy’s share in Rwanda reaches 52%

Rwanda does not produce enough electricity, and according to Nyakarundi, power prices in the country have more than tripled in the last decade. "This is largely because of monopoly. Until the market is open for fair competition, prices will continue to soar.”

Energy experts insist that the government’s exclusive rights on grid connection hinders the potential for decentralised power generation and consumer choice.

Liban Mugabo, one of the industry players based in Kigali, argues that the overreliance on donor funding in the renewable energy sector in Rwanda is hindering its sustainable growth.

"But having said that, for every decade, there is a theme that captures the zeitgeist and turns into an investment mania. It was gold in the 1970s, Japan in the 1980s, Nasdaq in the 1990s, China and commodities in the 2000s, and software in the 2010s. Meanwhile, the poor countries got even poorer,” he notes.

"Now that climate change has become a political and economic priority, I believe the global race to zero emissions is the investment zeitgeist for this decade. Each time poor countries try to close the gap, we have to play catch-up all over again,” he adds.

Reports indicate that renewable energy has the potential to provide electricity to the 600 million Africans currently deprived of it, create jobs, and stimulate industrialisation.

It is estimated that every dollar invested in renewable energies will yield an additional $0.93, and the deployment of renewable energies will progressively lead to lower costs, unlike fossil fuels.

ALSO READ: Rwanda’s energy journey over the past decade

Adoption taking off

More than ever, more people and companies are embracing renewable energy adoption in Rwanda.

Norrsken House Kigali, an innovation hub, is one such companies that have embraced renewable energy. It has installed photovoltaic system (PV), a power system that uses solar panels to convert sunlight into electricity.

According to Elie Habimana, the company’s Managing Director, the building meets 53 per cent of its energy needs with its PV installation. "We primarily run on solar during the day, then switch to the grid at night.”

Rwandan plans to revise the current energy policy to introduce new changes that will ensure accelerated adoption of renewable energy.

According to Jean Bosco Mugiraneza, the Director General of Energy at the Ministry of Infrastructure, the government is set to introduce a new energy policy, which will replace the 2015 policy with the main aim of accommodating various aspects of the energy sector.

"Today, we are speaking of a sector that evolves now and then. There are new technologies and innovations. We have seen nuclear energy coming up, green hydrogen is also taking off, and all these are innovations that we want to embrace,” he says.

According to Mugiraneza, the new policy is expected to consider "existing gaps” that have been brought to light during the evaluation of the existing guidelines.

"The other main important aspect is regulation which will also be revised,” he said, declining to share details.

When pressed for details, he said; "The policy has been completed on the technical level and details will be shared after its approval. It was developed with consultations from the private sector and energy developers.”

The targets

According to Rwanda Energy Group (REG), the country needs $1.5 billion to achieve universal energy access by 2029 after missing the 2024 target.

Currently, the target stands at 77.7 per cent, up from 34.4 percent in 2017 under the National Strategy for Transformation (NST1), which ran from July 1, 2017, to June 30, 2024.

In terms of energy generation, the target was to increase capacity from 208 megawatts in 2017 to 556 megawatts by 2024, by developing a mix of hydropower, thermal, methane, solar, and other renewable energy projects.

According to REG, there are projects in the pipeline to connect 1.3 million households between 2024 and 2029.

The projects to expand the energy mix through increased use of renewable sources involve the Nyabarongo II Hydropower Project, aiming to produce 43.5 megawatts of power.

The project is expected to measure 59 meters high and 363 meters long, creating a reservoir with a storage capacity of 803 million cubic meters.

Ruzizi III, a 206-megawatt hydropower project being developed on the Ruzizi River, is another priority project project. It flows along the DR Congo, Burundi, and Rwanda borders.

Rusizi III will add 68 megawatts to Rwanda’s grid.

Other projects in the pipeline are improving grid infrastructure and expansion, solar power projects, power trade, and promoting regional energy trade as part of the East African Power Pool (EAPP), and the Central African Power Pool (PEAC) to enable power trade projects.