Puerto Rico has reached 1.3 GW of residential solar and 185,000 residential batteries, while Wood Mackenzie expects an additional three GWh of residential storage by 2029. Utility-scale solar and storage projects are taking off, as described by a McConnell Valdés attorney.
Nearly 90 MW of residential solar power was added in Puerto Rico from July through September, said Max Issokson, a senior research analyst. at Wood Mackenzie, based on data from utility Luma Energy. That represents the U.S. territory’s second-best quarter ever, he said.
Issokson spoke at the annual conference of the Solar and Energy Storage Association of Puerto Rico, presenting highlights from a Wood Mackenzie Report titled “As the Power Grid Dies, Solar and Storage Bloom: How a Crumbling Power Grid Gave Rise to a Solar Power Superpower in Puerto Rico.”
Referring to Hurricane Maria and the prolonged power loss that caused loss of life in Puerto Rico, Issokson said, “The growth here has been a direct response to a fragile and unreliable grid, which is unfortunate, but also what has kept the market going.”
Puerto Rico now has approximately 1,250 MW of residential solar energy, based on quarterly data Issokson presented, combined with U.S. Energy Information Data until the end of 2023.
The U.S. territory will add about 330 MW of residential solar next year and 380 MW by 2027, WoodMackenzie projects.
Issokson said that given Puerto Rico’s median income of about $25,000, many residents don’t have the resources to buy a residential solar system with cash and loans. As a result, third-party financing represents 70% to 80% of the housing market there, dominated by Sunnova and Sunrun.
Wood Mackenzie estimates that there are 185,000 batteries in all of Puerto Rico, 81,000 of which are incorporated into a virtual power plant. The battery attachment rate for new residential solar has reached 100%, Issokson said.
Puerto Rico will add more than 3 GWh of residential energy storage through 2029, second only to the company’s projected additions for California, according to a slide presented by Issokson.
The analyst attributed the growth of residential solar and storage in Puerto Rico largely to high electricity prices due to imported fossil fuels, third-party financing and “one-to-one” net metering that is publicly supported by “the realization that resilience is an important part of survival.”
Utility scale
In 2020 the Puerto Rico Energy Agency ordered utility PREPA will contract for 3.75 GW of utility-scale solar and 1.5 GW of four-hour battery storage through six tender rounds by mid-2023.
Carlos Fernandez, lawyer and capital member at McConnell Valdés, reported at the conference that the tenders to date have resulted in projects under construction with 440 MW of solar and up to 485 MW of storage. Projects that are in the financing phase or have secured financing total 230 MW of solar and 510 MW of storage.
PJ Wilson, president of the Solar and Energy Storage Association of Puerto Rico, said last year that the slow pace of utility-scale solar development can be traced on an action by the Financial Oversight and Management Board (FOMB) for Puerto Rico, which was created by a 2016 federal law to restructure the territory’s debt, including PREPA loans.
PREPA had negotiated the purchase of 600 MW of utility-scale solar power between 2018 and 2020, and Puerto Rico’s energy regulator had formally approved the projects, Wilson said last year. But then the FOMB announced in mid-2020 that it would be cutting 450 MW of the 600 MW of project capacity.
As a result of that FOMB action, Wilson said, developers viewed Puerto Rico as a very high-risk market and many of them left the market.
Looking ahead, Fernandez reports that Puerto Rico’s governor issued an executive order this year to accelerate solar procurement. “Another key development,” he said, is a program to allocate storage to existing facilities using existing interconnection points, “enabling much shorter timelines,” with at least six projects approved. And the utility Genera is developing several storage projects at existing plants, with funding from the Federal Emergency Management Agency, he said.
The WoodMac Report is available here.
The solar and storage conference in Puerto Rico attracted 350 participants.
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