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Brink: Aruba's Bright Solar Vision, Clouded Bureaucracy

Sep 26, 2013

Solar is the most used word in my vocabulary. For ten years that I have been talking, writing, and promoting solar power. The next year of my life is about solar nation building. I am chronicling the ‘brink’ of solar power from the frontlines as my family and I move around in search of ‘natural’ solar markets — where solar is cheaper than utility power without subsidies. Brink is where the pieces are present and all that remains is the spark for ignition.

I have seen solar markets in the U.S. and Central and Eastern Europe explode (and some implode shorty after), and then I left solar projects in the U.S. behind at the end of last year. My family and I are looking for natural markets and set out to test this theory. We moved out of a beautiful San Francisco house, put our stuff in storage, and boarded a flight to Aruba.

An Ideal Spot for Solar

During our five months in Aruba, I can say the Caribbean market is as advertised — sunny, expensive, and progressive. Aruba is uniquely poised to take advantage of solar with a prevalence of sunshine, high-energy costs (and rising) and a visionary government. The government has had a green habit that has turned into a full addiction. The celebrity and global business leaders are listening to promises of 100 percent renewables in 2020. Not doing much but listening.

Aruba has self-proclaimed itself as the ‘Green Gateway’ to South America. The concept is to build a showcase out of Aruba with technology and investment strategies to spur green energy across the region. We believe in the idea so much we made it the thesis of our business model. It is election time in Aruba and time for vision to become reality. The 3.5-MW Aruba Queen Beatrix airport is destined to be one largest solar projects in all of the Caribbean. This project has had multiple groundbreakings and is plagued with issues because it is the first and biggest.

Aruba is a small island located only 15 miles off the coast of Venezuela and just 12 degrees north of the equator. The 100,000 inhabitants are mostly immigrants from the past 100 years. There are 50,000 homes and seasonal influx from tourists of South America and the U.S. — mostly New Jersey. There is a single water desalination and energy generation plant with 100-MW peak capacity exclusively run on bunker fuel. Bunker fuel is a dirty fuel with exceptionally organized distribution and relatively low cost. There are 10 3-MW wind turbines on the east side of the island and likely to be more.

The average commercial user pays Afl0.52($0.29)/kWh. The fixed tilt irradiance is roughly 1,750 kWh/kWp — sunny, really sunny. It is also windy and salty. Aruba luckily sits just out of the hurricane belt and has yet to get the full force of a named storm. The electricity distributor has excellent net metering rules allows for a full net of generation and consumption at the end of the month. If a business generates more energy than it consumes the utility will pay 50 percent of the tariff. In fact, the government has also enacted a 2 percent import tariff on solar equipment, down from the previous 12 percent.

What's the Holdup?

Aruba has all of the necessary ingredients — sun, sophistication, profit, policy, and responsibility. So, you would expect solar to be on every corner and warehouses full of panels. They are not. Why? There is no simple answer. The politicians look over their shoulder to Curacao only 50 miles away with nearly 4 MW of solar installed and lament slow adoption. The road to a solar nation can be complex. It does not need to be slow but thoughtful. The amazing vision of the government needs to translate to the machine that manages the daily affairs of the island. 

Let’s take a look at how disconnects manifest and slow progress. A 2 percent import tariff on solar equipment: This is a great incentive and simple legislation to pass quickly. But there are two problems. What is ‘solar equipment’ and who says? Aruba has imported tens of thousands of dollars in solar equipment, but the hardest part is this is not incompetence. There is no one individual to blame.

Interconnection is net metered and limited to 100 kW with a set grid usage fee. This is great, simple, and progressive policy. However, the details have complexity. The regulations written and approved in September 2012 have yet to produce a clear commercial interconnection agreement. Again, not incompetence but no one is pushing because no one is building solar. One of the reasons no one is pushing is there is yet to be a clear interconnection agreement. And repeat. What does 100 kW mean anyway? Is it DC or AC. DC is simple but hardly makes sense with when DC/AC ratios vary so widely. AC is a much more simple metric but requires someone to pick a side.

A business with a sustained load that will never back feed to the grid is also limited to 100 kW? Why? Then payments, how will the bill actually be reconciled. Who will do it? If there is a check to write, how will that actually work? What happens to the Grid Usage Fee? Can it move? What is done with the money? Too many questions lead to doubt, doubt becomes hesitancy, and hesitancy is a polite NO. 

The pieces of the Aruba puzzle are definitely at the brink. And so are the uncertainties. We have set out to identify the risks, mitigate the ones we can, assume or insure the rest. The answer is simple for adoption of solar: certainty. We headquartered here: SolCarib. We opened a showroom in town, hired a fulltime partner, and set the wheels in motion to pursue commercial and utility projects. All of these things cost money. We need to see real projects get built to justify keeping up the presence.

The key to success in emerging markets is permanence. We are selling something that supposedly lasts for decades with Chinese names that are hardly household. People want to know that there is a local number to call and familiar face to help solve the inevitable challenges over 20 years of ownership. I hope that is what we are building. 

The monthly electricity bill would always remind me why we were in Aruba. We would use more than 3,000 kWh with our single pane windows and crappy air conditioners. That would consistently run us over well $1,000 a month, five times our San Francisco house! High-energy prices are real and hurt. Aruba bureaucracy will catch up to unlock local capital and get projects built.

We packed up our minibus and flew the family to Buenos Aires leaving SolCarib as the first outpost. Stay tuned for the next update.

Lead image: Aruba map via Shutterstock

The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

David Williams currently leads SolCarib, focused on developing emerging solar markets. He has a technical and entrepreneurial background. Recently, he served as peer reviewer for the US DoE and NREL's Quality Assurance task force. He led technology, risk and investment as Chief Risk Officer for a...

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