Sun sets on subsidised solar

No new capacity for CORE programme

James Whittaker, founder of GreenTech Solar, standing on the roof of the Kimpton Seafire hotel, which holds a large solar array.

The Caribbean Utilities Company has halted its residential renewable energy programme, which allowed customers to sell solar-generated energy back to the power company at a subsidised rate.

There is currently no space left on the grid to allocate new capacity for renewable energy sources of any kind, according to utilities regulator OfReg.

That will change once plans for a large battery system, capable of storing 20 megawatts of electricity, are implemented by CUC.

However, CUC has no current plans for the Consumer Owned Renewable Energy programme, known as CORE, to be offered to new customers.

Instead, those customers will be channelled into the Distributed Energy Resource programme, which allows them to use whatever electricity they generate and sell some back to CUC at a much lower, unsubsidised rate.

“The approved quota for the CORE programme is now fully subscribed,” a CUC spokeswoman said in an emailed response to questions from the Cayman Compass.

“That means that there will be no additional residential or commercial customers added to the programme.”

The graphic shows how CUC’s DER programme works. Renewable energy advocates warn this is only viable for large commercial consumers and are asking for some form of the CORE programme to be maintained. – Image: Shutterstock

Industry concerns
The Cayman Renewable Energy Association has expressed concern about the change and is urging CUC and OfReg to continue with the CORE programme.

James Whittaker, president of the association, said the Distributed Energy Resource programme is only viable for large commercial customers and would not be practical for regular homeowners.

He believes regulators are considering short- and long-term options for an expansion of the CORE programme, though he acknowledged this would likely be at a lower rate.

Ultimately, it will be up to OfReg to decide the way forward.

The regulator weighs in
Malike Cummings, CEO of OfReg, confirmed that the 8 MW allocated for the CORE programme was fully subscribed. He said the capacity could not be raised immediately because Cayman has now reached its working limit for renewable energy on the national grid.

He said the renewable energy allocation – from a mix of the CORE programme (8 MW plus 1 MW reserved for government), the Distributed Energy Resource programme (3 MW) and the Bodden Town solar farm (5 MW) – had hit the 17 MW ceiling.

“The addition of intermittent solar power above the 17 MW limit would compromise grid stability, which could lead to brownouts and, in the worst-case scenario, blackouts,” he said.

“Furthermore, any additional intermittent power would reduce CUC’s diesel generators’ operational efficiency and lead to higher electricity costs for consumers.”

Once the battery storage is introduced, that dynamic will change and the limit for renewables on the grid will be raised to 29 MW, freeing up more space for more residential solar.

Whittaker, also the CEO of Greentech, said the solar industry could be expected to take a substantial hit in the meantime. He said the renewable energy association was in talks with OfReg in the hope that temporary capacity could be freed up to keep the industry viable until the battery project is completed.

Cummings said the regulator was considering various options for an “interim solution” to ensure access for potential solar customers and prevent disruption to the industry.

GreenTech Solar completing a residential installation approved under the CORE programme.

Long-term plans
Residential rooftop solar remains an important part of Cayman’s long-term energy plan, which has set a goal that 70% of Cayman’s electricity generation should come from renewable sources within 20 years.

While the bulk of that is expected to come from massive utility-scale solar farms, CUC’s Integrated Resource Management Plan includes 46 MW of power from rooftop solar – more than five times the current allocation.

According to CUC’s statement, that capacity is not likely to come from the CORE programme, which was subsidised in line with a policy objective to incentivise the early development of the solar industry.

Capacity was released in tranches, with the rate paid to customers reduced each time.
CUC said it had already allocated more space in the programme than originally envisaged.

It said new solar customers were now being directed to the Distributed Energy Resource programme, which still has space available. Once the battery-storage project is completed, additional capacity for residential solar customers will also be allocated through that programme, CUC said.

Whittaker said it was not feasible to simply switch potential CORE customers to the Distributed Energy Resource programme, which he said was only economically viable for large commercial clients. He added that the consistent rate offered through the CORE programme made it a more reliable option for bank financing than DER, where the price paid to consumers is based on the cost of fuel, which can fluctuate.

‘CORE should be maintained’
Whittaker believes some form of the CORE programme should be maintained, even if it is at a lower rate.

“The CORE programme is vital to continue on, as one of the key consumer options for solar energy. Like most feed-in tariff programmes, the subsidies paid under this programme are intended to be reduced and eventually eliminated so that the energy being sold back to the grid is at unsubsidised rates to consumers,” he said.

He added that reducing bureaucracy and increasing the amount of solar energy that consumers were allowed to sell back to the grid were the best ways to lower costs quickly.

Currently, the CORE programme is restricted to small units of 10 KW generation per consumer. Whittaker said increasing this cap to 250 KW per consumer would allow people to use more solar panels, making a lower, unsubsidised rate workable.

He added that the current approval and regulatory process for residents who wanted to install solar was convoluted and expensive, and could be simplified or eliminated completely.

*James Whittaker of Greentech is no relation to James Whittaker, the writer of this article.