Is solar cooling a viable solution for agricultural value chains? Challenges & findings from a field study in Kenya
Solar cooling technologies, such as cold and freezing rooms, milk cooling systems or ice makers, offer promising solutions for reducing post-harvest losses in sub-Saharan Africa, with significant potential to transform smallholder livelihoods. This comprehensive field study, conducted by ARE Member Phaesun, examined business models and financing schemes for solar cooling solutions across Kenya’s agricultural value chains. Through six weeks of on-site research combined with systematic qualitative analysis, empirical case study validation and expert interviews, this research identified the conditions and pathways for sustainable deployment of solar cooling technologies.
Key findings from field research
Across all projects reviewed, a clear reduction in post-harvest losses and an extension of the shelf life and quality of food products could be demonstrated. These improvements were partly associated with moderate to, in some cases, significant income increases for project stakeholders, farmers, or system operators. Several of the assessed projects relied on cooling systems powered exclusively by solar PV and, in some cases, used natural refrigerants, thereby minimising operating costs and environmental impacts. As a result, most projects demonstrated both social and environmental sustainability. However, the primary focus of the assessment was on economic performance. The following key findings emerged.
Our analysis revealed an “impact capital gap” in the solar cooling sector, with economic viability dependent on scale, product value, and financing conditions. Four distinct operational categories emerged from the analysis:
- Market- & Export-Oriented Operations demonstrate strong economic viability with payback periods of 3-4 years. These operations process high-value produce (e.g. French beans, flowers, fresh herbs) with consistent throughput and professional management, accessing market-rate financing without subsidies. They benefit from economies of scale and established market linkages within structured value chains.
- Aggregation Models where operators purchase, cool, and resell produce can achieve profitability with appropriate support. Dairy cooperatives processing substantial volumes demonstrate viability through consistent margins and diversified revenue streams. Success factors include organised supply chains and value addition through quality preservation.
- Cooling-as-a-Service (CaaS) provides accessible cooling without upfront investment, particularly benefiting market traders and farmer groups. While utilisation rates vary with seasonal production and market dynamics, CaaS models show promise when targeting appropriate value chains. Viability improves significantly with high value produce where cooling costs remain proportional to product margins.
- Individual Smallholder Models require substantial support but deliver highest social impact. With commercial lending at 15-20% interest rates exceeding potential returns, these models need 40-100% subsidisation through donor programmes or government initiatives. However, when implemented successfully, they directly address rural poverty and food security.
The financing landscape presents opportunities for innovation. Beyond traditional donor subsidies, emerging mechanisms include asset financing partnerships, and blended finance structures. Successful deployment often combines multiple financing sources, matching funding types to beneficiary capabilities. Cooperative models show potential when coupled with capacity building, while specialised financial products for cooling infrastructure are beginning to emerge.