The Caribbean Utilities Company has suspended its private power-generation program for residential and business customers.
CUC’s consumer-owned renewable energy program, named CORE, hit its 6 megawatt limit in March, leading the utility to halt new applications for connections to the national power grid.
The limit is determined by CUC engineers, who estimate how much renewable-generated power Cayman’s transmission and distribution grid can safely handle.
Sacha Tibbetts, vice president for customer services and technology, said CUC and its Utility Regulation and Competition Office overseer are in talks and hope for a resolution by the end of the month.
The company has revised the CORE limit upward four times since starting the program in 2011. The most recent revision was last May.
James Whittaker, chairman of the Cayman Renewable Energy Association and founder of solar designer and installer Greentech, said that Cayman’s solar industry “has come to a screeching halt for almost one month now since they announced the allocation is full.”
The association, he said, “has suggested the allocation capacity be handled in a more proactive way instead of waiting until it runs out. However, we find ourselves again in this situation,” making it “extremely difficult for the local industry and … very frustrating for consumers.”
CUC paid CORE subscribers approximately $2.1 million annually for their electricity, pointing out that the money came from the company and from non-CORE customers.
“It is recognized that this service is subsidized by the public, and CUC and OfReg are in discussion on how this subsidy can be minimized while keeping customer investments in renewable energy systems viable,” Mr. Tibbetts said.
“Without limiting the amount of CORE purchases,” he said, that sum “would become inequitable for this group to bear,” he said.
Mr. Whittaker said, “The current cost to the country to support the CORE program is still less than 10 cents per day for every person in the Cayman Islands,” a figure “that does not include any of the benefits – jobs, added economic activity and investment, carbon-emissions reduction, health and environmental benefits from burning less diesel, etc.
“There has been no study thus far to weigh the true costs versus benefits of the CORE program,” he said.
Charles Farrington, OfReg Executive Director for energy and utilities, said a rush of residential applications had exhausted CORE’s 6 MW capacity, catching “CUC and OfReg a little flat-footed again, but we are working diligently to devise a solution that will continue the ability for consumers to install renewable energy such as [private] solar,” offering “sufficient economic benefits to hopefully not slow down the momentum achieved over the past few years.”
He hoped for new programs to renew lagging commercial interest in CORE.
CUC has periodically reduced payments to owners of solar- and wind-power systems, controlled the size of those systems and extended CORE’s contract period from 20 years to 25 years.
Those changes have drawn industry complaints that prolonged agreements and reduced rates have made it increasingly hard for consumers to finance renewable energy systems and achieve a return on their investment.
Two weeks ago, the company indicated the prospect of still lower rates in any renewed program.
Mr. Whittaker said his understanding of pending CORE changes suggests a dramatic reduction in residential system size – reducing the 20 kW limit to 5 kW – and a 2 MW increase to the 6 MW cap with an imminent review, possibly this summer.
Smaller systems might encourage more subscribers, Mr. Whittaker said, although CREA asked for a 15 kW limit, “as it will increase the cost of solar due to small economies of scale and it will do nothing for increasing the likelihood of less wealthy persons to adopt clean energy.”
“OfReg should not be changing the CORE rates until [government’s] energy policy committee has done a complete assessment as to the full costs and benefits,” he said.