THE BARBADOS RENEWABLE Energy Association (BREA) has welcomed a decision by the Fair Trading Commission (FTC) aimed at providing investors such as householders and businesses with a greater incentive to invest in renewable energy installations.
President of the energy body Aidan Rogers said: “This decision offers certainty for investors under the existing RER (Renewable Energy Rider) programme in relation to securing a stable Return on Investment now that there is a fixed rate which is delinked from the Fuel Clause Adjustment.’’
The FTC announced a temporary RER credit would be set at 41.6 cents per kilowatt hour for solar photovoltaic systems and 31.5 cents for wind installations “until such time as a permanent rate may be established”.
It said in an advertisement in the media the credit would apply to renewable energy suppliers with capacities up to 500 kilowatts.
As a result of the decision the eligible capacity limit of the RER has been expanded to 500 kilowatts.
Since 2010 householders and businesses have been investing in renewable energy systems regulated by the Commission under what was initially a pilot project known as the Renewable Energy Rider.
BREA, faced with members whose businesses were crawling to a standstill due in part to a sharp decline in crude oil prices, had appealed to Government for a temporary price floor of between 40 and 45 cents per kilowatt hour. It was noted that investment had almost come to a halt because of inadequate incentives for investors and finance companies such as commercial banks and credit unions.
Barbados Light & Power Co. Ltd had proposed a fixed renewable energy compensation rate. The BL&P submitted rates based on avoided cost, resource cost and social value and wanted a long-term decision. BL&P proposed rates of 37.8 cents for solar photovoltaic installations and 29.8 cents for wind systems.
The Commission conducted surveys of the financial sector and assessed energy systems cost and concluded the resource cost approach removed elements of volatility and instability, which it described as a primary source of concern for stakeholders in the sector.
“The use of the resource cost approach has two main critical effects: the delinking of the purchase price of the renewable energy resource from the price of oil and the promotion of new investment in the renewable energy sector by providing an attractive, known and stable return to investors,” the FTC said in its decision announced Wednesday.
“This decision now offers greater opportunity for average Barbadians to invest in systems for the sole purpose of making a return on investment,” said Rogers, who was recently re-elected to head BREA. (PR)