Unilever has invested approximately $540,000 in an 800-kilowatt solar installation at its Nairobi factory. The solar system, which became operational in June, is expected to supply about 30% of the factory's electricity and target annual energy savings of about $230,000. This move is part of the company's efforts to reduce its reliance on conventional power sources and make energy costs more predictable. The investment is also expected to have a relatively short payback period of about 2.3 years.
Electricity remains a significant operating expense for Kenyan businesses, with manufacturers increasingly turning to solar and other measures to reduce their exposure to grid power costs. The World Bank has estimated Kenya's average electricity cost at about $0.23 per kilowatt-hour, making power relatively expensive for businesses compared with several other markets in the region. Kenya Power's base tariff for large consumers using between 1,000 and 15,000 kilowatt-hours a month fell to KES 18 per unit in the year ended June 2026 from KES 18.30 a year earlier.
The pressure to manage electricity bills has encouraged more businesses to shift consumption to cheaper periods and invest in alternative sources of power. More than 2,600 businesses were using Kenya Power's discounted time-of-use electricity tariff in the year ended June 2026. Unilever's investment in solar power is part of a broader programme to reduce the factory's reliance on fossil fuels and increase renewable-energy use. The company plans to further reduce its use of fossil fuels by shifting hot-air generation from heavy fuel oil to biomass-based fuels.
Unilever said emissions from its Nairobi factory are now about 40% below 2023 levels, which the company uses as its baseline for measuring the reduction. The decline reflects multiple measures implemented since 2023, including the earlier conversion of the factory's boilers from heavy fuel oil to biomass and the 800kW solar installation. Unilever has not attributed the full 40% reduction to the solar project alone, but rather as part of a broader programme to reduce the factory's reliance on fossil fuels.
The economics of the Nairobi project illustrate why renewable energy is gaining traction among manufacturers in Kenya. Unilever expects the 800kW system to provide nearly a third of the factory's electricity while saving about $230,000 a year. That represents annual savings equivalent to about 43% of the initial investment. The investment demonstrates that sustainability and strong business performance can advance together.
The unveiling of the solar installation was attended by Unilever's senior officials, including Luck Ochieng, Managing Director for Unilever East Africa, and Elodie Kouassi, Head of Supply Chain, East Africa excluding Ethiopia. The company said the next phase of the programme will focus on replacing heavy fuel oil used in hot-air generation with biomass-based fuels, further reducing the factory's dependence on fossil fuels.
Unilever's Nairobi investment combines two objectives: lowering the factory's operating costs and cutting its carbon footprint. For manufacturers, solar power can provide a hedge against fluctuations in grid electricity costs while also reducing exposure to fossil-fuel prices. The company's investment in renewable energy is expected to make its operations more resilient and competitive.
Key points
- Unilever invests $540,000 in 800-kilowatt solar installation at Nairobi factory to reduce energy costs and reliance on conventional power sources.
- The solar installation is expected to supply about 30% of the factory's electricity and target annual energy savings of about $230,000.
- Unilever's emissions from its Nairobi factory are now about 40% below 2023 levels, reflecting multiple measures implemented since 2023.
