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ANGUILLA, British West Indies, May 24, 2006
(Refocus Weekly)
Electric utilities in the Caribbean region should
operate solar water heating fee-for-service programs, according to a
guide prepared for the application.
“The unstable and unpredictable cost of energy has been and will
continue to be a major concern to countries dependent on petroleum
resources for the generation of electricity,” says William Guiney of
Caribbean Solar Technologies in ‘Guide To Fee-for-Service Solar
Water Heating Programs For Caribbean Electric Utilities.’ The report
was prepared under the ‘Innovative Financing to Accelerate Solar
Water Heating’ initiative funded by the Renewable Energy & Energy
Efficiency Partnership, to increase knowledge and use of financial
and commercial innovations to expand solar water heating.
“Prices not seen in recent times have forced electric utility
companies to pass on the cost of generation to their customers” and
these high prices are causing “significant financial hardships to
the residential and commercial sectors as well as the utilities and
local governments,” it notes. “Island nations, especially in the
Caribbean region, are caught in the middle of the energy crunch”
because they are largely dependent on diesel generation for
electricity.
“As fuel imports and electricity demand increase in response to
explosive residential and resort development throughout the region,
utilities and governments are forced to expand generation capacity,
slow the rate of growth, or turn to alternative solutions to meet
the growing demand for electricity,” it adds. “The need for growth
and economic development, combined with the desire to maintain the
quality of life, necessitate new thinking about the role for
renewable energy.”
“Renewable energy use is growing in the Caribbean region, and it is
time for the electric utilities to explore how the available options
can best serve their interests,” it continues. The document outlines
a “fee-for-service business opportunity” that offers utilities a
means to implement a “cost-effective solar renewable energy program
with minimum risks and high returns,” noting that utility-operated
solar water heating fee-for-service programs “can be ahead of their
time.”
Higher up-front costs for solar water heaters have kept their market
share low in most of the Caribbean, with the notable exception of
Barbados which has achieved high penetration levels through
government subsidies. Utilities in the region can use the guidebook
to develop solar water heating programs which would increase the use
of solar water heating for residential, commercial and industrial
applications, and its focus on the Caribbean region shows that solar
to heat water is a “cost-effective solution.”
Utilities are looking for ways to meet the growing demand for
energy, but face a number of challenges from providing base load
while meeting peak demands, to expanding the grid to new sites and
finding ways to increase their environmental stewardship. Utilities
are being require consumers to generate their own electricity from
wind, solar PV and other renewable energy technologies, but private
generation is increasingly seen as competition and lost revenue by
the utility.
Many utilities are under pressure to allow net-metering, which often
is seen as “direct competition to the utility, but some governments
in some countries are under pressure to change laws to encourage
greater use of renewables, it explains. “It may seem surprising that
solar thermal energy as applied to heating domestic hot water (an
idea that has been around for a long time) offers what electric
utilities and their residential customers may want most in a new
product and service.”
Solar thermal systems will reduce consumption of electric grid power
in the same way as solar PV technologies increase useable energy at
the customer site, and a solar water heater that offsets 3,000 kWh
of electricity per year has the same impact on grid consumption as a
PV system that generates 3,000 kWh.
Experience in the U.S. indicates that the cost to a consumer for
solar hot water has a levelized cost of US$0.04 to 0.08 per kWh and,
“given the excellent solar resources in the Caribbean, it would
likely be toward the lower end of this spectrum or less.”
The report was developed with help from the Florida Solar Energy
Center and Green Markets International of Massachusetts, as well as
the Vitae Civilis Institute of Brazil.
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