OfReg seeks proposals for solar energy value study

OfReg, Cayman’s utility regulator, is commissioning a study on the value of solar energy to the Cayman Islands.

The office said in a request for proposal that its regulatory objectives are to foster grid modernisation, conserve natural resources, preserve the environment, and advance the national energy policy goals, while ensuring that financially healthy utility companies provide safe, reliable and quality services at reasonable rates for consumers.

The Electricity Sector Regulation Act, among others, requires the office to monitor and regulate the rate, the price, and the terms and conditions of electricity generation.

OfReg said that to establish fair and equitable rates that are proportionate to the cost of renewable energy generation, it now requires a comprehensive study on the value of solar.

This study should independently assess and determine “solar’s full value to society at large based on a holistic set of costs and benefits, in addition to the impacts to utilities and ratepayers”.

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The consultants selected for the study will have to evaluate the net present value of long-term avoided costs as well as the benefits of distributed solar generation, such as residential rooftop solar panels, based on a standard energy efficiency benefit-cost analysis in the Cayman context.

The study should further recommend the net value of the costs and benefits to Cayman’s consumers and society as a whole to inform rates and tariffs.

As of May 2021, Grand Cayman had a 9.5 megawatt renewable energy capacity from consumer-owned rooftop solar panels under the CORE (Consumer Owned Renewable Energy) programme, a 5 MW solar farm, and 3 MW renewable capacity allowing residential and commercial consumers that are part of the Distributed Energy Resources programme to provide surplus energy to the grid.

According to OfReg, customer-owned renewable energy accounts for an estimated 10% of the total island-wide electricity demand.

However, the available residential renewable-energy-generation programmes have been oversubscribed and hampered by the stop and start nature of when and how much capacity was assigned to them by the regulator.

Earlier this year, OfReg also slashed the rate paid for solar energy to homeowners.

According to companies that install rooftop solar panels, the latest reduction of the subsidised rate was so steep that it would lead to further job losses in the industry and put into doubt the ability of homeowners to opt for renewable energy technology.

The regulator defended its decision to set a lower rate than the one recommended by an independent committee, saying that the rate paid under the CORE programme continues to provide subsidies to the owners of solar energy systems.

Going forward, the value-of-solar study OfReg is now commissioning will inform the rate-establishing process.

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  1. OfReg once again desperately trying to fool the Cayman public and trying to “spin” this to their own advantage to make it seem as if they’re actually being proactive and competent.

    Here’s the actual facts on this:

    1) CREA has been requesting OfReg do this since 2015 (then the ERA) and they have CONTINUALLY refused to do so.

    2) OfReg is being “forced” to do this now because their own independent rate committee as well as the Government’s Energy Policy Council (EPC) approved this and budgeted to pay for it NONE of which came from OfReg.

    3) When they were now forced to do this and the Government’s EPC agreed to pay for it, suddenly OfReg wanted to ‘control the process’ and have taken 6 months to draft a simple TOR/RFP document, something that should taken a week or two at most; all while they sit idly by taking their sweet time dealing with these issues as the loca solar industry continues to remain largely closed and jobs lost on a monthly basis due to OfReg’s negligence.

    4) OfReg now issues this press release to make it seem like they are being competent and proactive when in fact they are being FORCED to do this, after 7 years of refusing tor or so, kicking and screaming the whole way.

    5) OfReg said they had no budget for this but suddenly when the government/EPC paid for it they magically found the money and time to do so.

    6) OfRegs management team are on record as holding the position that consumer renewable energy is NOT in the best interest of the Cayman Islands, despite that being false and against the NEP and law.

    7) The government and the EPC should NOT let OfRegs management team control this process because the information that is most likely to come out as a result of a proper and unbiased study is going to destroy the OfReg management teams years long narratives around consumer renewables and expose the level of incompetence consistently displayed over there on this issue.

    So don’t be fooled by this latest PR nonsense, these guys are being dragged to this kicking and screaming and have spent 7 years trying to avoid this and the last 6 months delaying it.

    Just the facts. OfReg you can call me if you dispute any of the above, you have my number.

    James Whittaker
    President- CREA