Lawmakers voted in favour of a private member’s motion by UDP backbencher Cline Glidden to make it easier for people to produce and use renewable energy in their homes or businesses.
The motion by Mr. Glidden, a West Bay Member of the Legislative Assembly, called for the government to “take all necessary steps to eliminate all utility-imposed restrictions on a person’s individual or business right to use renewable energy systems to offset utility consumption, thus reducing or eliminating utility costs and … to implement net metering using the [US] Interstate Renewable Energy Commission model rules for both net metering and grid interconnection”.
Under the current Consumer-owned Renewable Energy arrangement of Feed-in Tariff System, or FITS, the Caribbean Utilities Company, which has the exclusive right to distribute electricity in Grand Cayman, buys 100 per cent of electricity produced by alternative energy systems from those who have signed up for the programme at 37 cents per kilowatt hour. Those individuals then buy electricity back from CUC’s main grid at the retail rate, which is currently 29 cents per kilowatt hour.
Net metering enables a bi-directional flow of electricity. Throughout the day, a customer’s solar, wind-generated or other alternative energy system may produce more or less electricity than is needed for his or her home or business. When the system’s production exceeds the customer demand, the excess energy generation automatically goes through the electric meter into the utility grid, running the meter backward to credit the customer’s account. When the customer’s electricity demand is higher than the renewable energy system is producing, the customer relies on additional power from the utility company.
Mr. Glidden pointed out that there had not been much uptake from consumers of the pilot FITS system.
The one-year pilot programme was introduced in January 2010 and is under review. By last month, only nine people had signed up for the programme – eight residential customers and one commercial business.
“What is proposed in this motion is a system that would allow a homeowner to produce electricity for his own use and whatever electricity that is not used in its own facility, that would then be sold on to the gird, sold to CUC, at a rate equivalent to the rate that is charged by CUC. Hence, we have net metering,” said Mr Glidden.
In 2010, the Electricity Regulatory Authority turned down a proposal made by CUC on 11 June that year to introduce a form of net metering in Cayman. The regulator considered that CUC’s proposal did not meet the base criteria of true net metering for a variety of reasons, which included CUC’s suggestion to use two meters instead of one; to limit the number of people who could use net metering to 100; and instead of paying the value of exported energy directly to the consumer/generator, the money would be credited to the consumer after 12 months.
CUC also wanted to recover the value of the credit for exported energy to the grid through the monthly fuel factor, but the energy exported to the grid would be resold by CUC to other consumers at the retail rate, which is the base rate plus the fuel charge. According to a letter from the late managing director of the Electricity Regulatory Authority Philip Thomas issued in November 2010 in response to a Freedom of Information request: “the ERA did not consider CUC’s June 11 proposal took sufficient account of the value of those resold kilowatt hours”.
Mr. Thomas said in the letter that the regulatory body had turned down the CUC net metering proposal to “protect the economic interests of consumers”.
The Electricity Regulatory Authority subsequently approved CUC’s FITS proposal.
Mr. Glidden acknowledged during his motion debate in the Legislative Assembly on Wednesday, 11 April, that installing alternative energy systems in homes and businesses was expensive, but said the systems would pay for themselves over a few years. He used an example of a home or business owner who was being charged $20,000 a year by CUC for electricity. If that person spent $100,000 on an alternative energy system, it would take five years, not including any interest the person may have to pay if he or she has borrowed the money, to get a return on his or her investment, he said.
Arden McLean, MLA for East End, who was the former minister of works, said he was in favour of the FITS system and did not want to see net metering adopted as the only option in Cayman. “I hope we don’t go to the point where it’s only net metering because the consumer will not benefit as greatly as [with] FITS,” he said. He urged CUC to work with the Electricity Regulatory Authority again and make another proposal to Cabinet regarding Consumer-owned Renewable Energy production.
“FITS protects people, net metering does not,” Mr. McLean said.
Mr. Glidden’s motion seeks to remove restrictions placed by CUC on consumers over the amount of electricity they can generate using alternative power means.
Under the FITS programme, there is a quota of one megawatt of energy that can be produced and added to CUC’s grid. The maximum permitted size of the individual renewable energy systems is the lesser of the customer’s peak demand for existing systems measured over a period of up to 12 months or the estimated peak demand for new connections, with a maximum of 20 kilowatts for residential systems and 50 kilowatts for commercial systems. Commercial customers were initially limited to 70 per cent of the 1MW of capacity installed.
By March, just 8 per cent of the 1 megawatt quota of energy had been supplied by the consumers who signed up for the scheme.
Mr. Glidden told lawmakers that with Cayman having an average of 320 days of strong sunlight a year, people should be encouraged to use that sunlight for solar power and should have incentives to produce alternative energy.
He acknowledged that in the long run, CUC would make less revenue if much more alternative energy was produced and used in Cayman, but said ultimately the territory and the consumers would benefit significantly as the Islands’ dependence on fossil fuels would be reduced and the utility bills of users would also be reduced.