A report by James Ellsmoor for Forbes.
Puerto Rico has passed a bill to radically transform the island’s economy with renewable energy as the central pillar. The territory’s legislature today approved Senate Bill 1121 (PS 1121), the Puerto Rico Energy Public Policy Act, which will set the island on a path to 100% renewable energy by 2050. .
Receiving widespread political support, PS 1121 passed with bi-partisan support with 21 votes to 4 in the Puerto Rican Senate. The bill now waits to be signed into law by Governor Ricardo Rosselló in the coming weeks, who has already expressed his strong support for 100% renewable energy as part of his post-Hurricane María recovery vision and plan. Currently standing at just 2% of all electricity generation, renewable energy offers a cheaper alternative in Puerto Rico that can improve resilience to future natural disasters.
The bill’s impact is wide-ranging. PS 1121 establishes a 100% renewable energy portfolio standard (RPS) by 2050, bans coal plants starting in 2028, provides for automatic interconnection to the grid of customer-sited solar energy systems below 25 kilowatts, and reduces the utility approval time to 90 days for commercial and industrial solar projects. It also creates a 5-year window of full compensation for consumers’ solar energy production and streamlined permitting for utility-scale projects.
The changes are intended to create a more resilient island built upon state of the art technology that transcends the diesel and coal-fired centralized generation electricity model, towards a clean, more decentralized energy system with local, renewable resources at its center. PS 1121 also aims to empower prosumers – customers that both produce and consume energy – with stronger policies on net metering and interconnection of solar, storage and microgrid projects.
Additionally, the PS 1121 bill establishes that solar energy users will have access to net energy metering within one month of a system’s installation, clarifies that the existing net energy metering policy shall be in place for no less than five years, and that new solar consumers will be grandfathered and protected from future policy changes for the next 20 years. The bill also exempts solar electric storage equipment from sales taxes and grants the Puerto Rico Energy Bureau more fiscal autonomy and powers to perform performance-based metrics, among many other innovations.
Homes damaged by Hurricane Maria are seen in an aerial photograph taken over El Negro, Yabucoa, Puerto Rico. One year after Hurricane Maria slammed ashore in Puerto Rico, decimating the island’s power grid, ripping the roofs off houses and causing the deaths of almost 3,000 people.
“This bill is a huge step in building a sustainable future for Puerto Rico”, said Senator Eduardo Bhatia, a leading proponent of PS 1121, “now we can move forward in developing an economy built on strong foundations that will provide more opportunities for future generations. By embracing renewable energy, our islands can reduce the reliance on fossil fuels, benefitting both the natural environment and our economy.”
Key Provisions of PS 1121:
- 100% renewable energy by 2050 and 40% by 2025.
- Banning coal plants starting in 2028.
- 90-day interconnection for solar net-metered systems 25kW to 5MW.
- Automatic interconnection & 30-day net-metering for solar under 25kW.
- A requirement for utilities to purchase solar renewable energy credits (SRECs) for renewable portfolio standard (RPS) compliance.
- Maintains “true net metering” for the next 5 years, with 20 year grandfathering for new clients.
- Requires streamlined permitting of utility-scale ground-mounted solar projects for the next 5 years, with 20 year grandfathering for new clients.
- Eliminates the ability of the utility to deny interconnection because of “full feeder”, or “right of way” issues.
- Eliminates 5-year recertification requirement for net metered systems, with no need for people to go to the utility to get recertified every 5 years as is currently the case.
- Systems installed under post-Maria Executive Order remain legally interconnected.
- Bans all solar production taxes and clarifies that Sales & Use Tax Exemption applies to energy storage and leased systems.
- Implements a 30% energy efficiency requirement.
Despite being one of the poorest parts of the United States, Puerto Rico is home to one of the highest costs for electricity in the country – islanders pay over double the rates paid by their relatives in Florida. This is largely due to the high cost of shipping in fossil fuels to run the highly polluting diesel generators. It also means the island has a highly centralized grid system that leaves it vulnerable to outages in storms. On average, households went 84 days without electricity after Hurricane María, but in the most isolated regions some waited almost a whole year to be reconnected. The bill aims to reduce prices and reduce the risk of such an outage happening again.
Renewable energy companies have greeted the news with enthusiasm. President of the Solar & Energy Storage Association of Puerto Rico (SESA-PR) P.J. Wilson said, “Policymakers have listened to the solar and storage industry leaders’ input. PS 1121 eliminates many of the barriers that have frustrated solar deployment for years and creates a strong vision for ramping up clean energy, but implementing the law will require strong continued industry collaboration before the utility’s regulator and other agencies.” SESA-PR is next month organizing the Solar Power Puerto Rico conference, which will be a rallying point for industry leaders to discuss next steps after PS 1121.
In July 2018, Julio Rosario installs a solar energy system at a home in Adjuntas, Puerto Rico. The nonprofit environmental group Casa Pueblo has installed solar systems at two hardware stores, one barber shop and several corner stores that activists hope will serve as a power oasis where people can charge their phones and store medications during a storm if needed.