“The production and use of renewable energy products offers an opportunity for major saving of foreign currency…[but] Government incentives and other forms of support are needed to accelerate progress towards the production of electricity entirely from renewable sources.” – Central Bank of Barbados press release December 2015
BY AUGUST, the Barbados Light & Power Co. Ltd (BL&P) says it will be in a position to provide 7 700 homes with solar-generated energy annually, according to the company’s latest newsletter.
The energy will come from the ten megawatt (MW) solar photovoltaic (PV) farm at Trents, St Lucy, just west of St Lucy’s Parish Church. The plant, which has almost 45 000 PV panels, was constructed by the Spanish company Grupotec, which worked with local subcontractors, said the company newsletter.
The solar plant was connected to the grid for the first time in early June, cost $43 million to build and will result in a fuel cost saving of the equivalent of US$5million per year in foreign exchange.
Now, it would be nice if the rest of the sector sounded as exhilarated by all this energy revolutionising as does the BL&P. I mean, the Fair Trading Commission (FTC) is playing its part, right?
Right. In July, the FTC did increase the rate payable to homes and businesses which produce their own electricity from solar energy, setting it at 41.6 cents per (kilowatt hour) kWh for electricity made from solar PV and 31.5 cents per kWh from wind.
The FTC also raised the capacity limit for PV systems to 500 kilowatts to allow for greater participation in the programme. But one of the people whose company has emerged as a key player in the field is not happy. He believes that field is still not level.
Ralph “Bizzy” Williams is chairman of Williams Industries Inc., a Bajan conglomerate which uses solar PV energy to reduce electricity costs for many of its subsidiaries, including NSR Ltd, which operates Sky Mall at Haggatt Hall. The chairman is not breaking out the champagne over the latest FTC decision.
Here’s what Williams told me in a recent interview on the subject: “It will improve the revenue that we get from the panels that we have already installed, but it does not prepare the ground for future investment in solar.”
What do you mean by preparing the ground for the future, Mr W? Well, he said, that 41.6 cents per kWh “is not enough to repay a reasonable bank loan, so it’s not going to encourage people to invest more. It will help people who have already stuck their neck out and invested, like me, to pay back the loan, but even so, it will not provide enough funds to meet the repayment, so we will have to keep subsidising it for the next seven years.”
Talk about a lukewarm response. Ah, but, I asked, did you go to the trouble of telling the FTC this? I mean, did you do a spreadsheet or anything?
“I did produce a detailed spreadsheet,” he told me, “and I submitted it to the Fair Trading Commission to show and prove that with the current cost of solar and the installed price and so on, you need 50 cents to be able to generate enough cash to insure the system, which you have to do – no bank is going to lend you money to put up a system which is not insured – to pay the maintenance, and so on.”
Oh, Bizzy, always coming up with uncomfortable facts.
The effect of not getting that extra ten cents, computes Williams, is that “even if you put up 25 per cent, and borrow the rest, you still won’t have enough to pay back the bank in seven years”.
However, Williams says he will still go ahead and expand the PV solar system at Sky Mall from 150 to 500 kilowatts, as allowed by the new FTC decision, because “I always remain optimistic and think that, sooner or later, the penny will drop and somebody will understand, and I will be in a better position then.”
He continued, giving us some insight into his ability to leverage his company: “The reason why I would do it is because we have been able to borrow the finance overseas in US dollars, and to borrow more than we need to buy the imported components – as much as 20 per cent more, actually. So when we do a thing like this, it would end up with foreign exchange flow into Barbados, which is what we need now. It will provide employment and it will be a long-term investment.”
But even with a PV solar system expanded to 500 kilowatts, Sky Mall would still only be getting 60 per cent of its electricity from, well, the sky. “We would still only create about 60 per cent of our electricity,” said Williams. “We would need to cover the car park as well to run the entire mall (on solar energy). And I’m prepared to do it.” But then he gets that look in his eye, and asks me: “Will I be able to get planning approval? Your guess is as good as mine.”
And that sort of makes me wonder why the power company can get permission to build a ten MW solar farm while others are still awaiting approval on their applications.
Like almost everything else, with solar PV you need a level playing field, so you can install and tilt your panels 15 degrees to the south toward the equator, where the sun shines at it hottest during the day.
