New proposals in the Finance Bill 2025 could slow down Kenya’s transition to  clean energy by raising the cost of key technologies such as electric vehicles, solar power systems and energy storage solutions. 

The Bill has proposed the migration from the list of zero-rated items to that of VAT exempt goods, which analysts say will increase the cost of goods.

Among the goods that are currently VAT zero-rated but will become VAT exempt if the proposals sail through the National Assembly include electric bicycles, solar and lithium-ion batteries, electric buses and bio-ethanol vapour stoves.