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Puerto Rico led the country in residential solar installations per capita last year, but its continued progress is threatened because a law extending solar net metering through 2031 has been challenged by a federal oversight board.
Puerto Rico added more rooftop solar per capita than any U.S. state last year, said PJ Wilson, president of the Solar and Energy Storage Association of Puerto Rico (SESA-PR). , in a webinar.
The US territory has increased its renewable generation to 12% from 4% three years ago, he said, and could reach 18-20% next year, compared to the 40% target set by Puerto Rico law.
Given current trends, Ohm Analytics founder Chris Collins said Puerto Rico will account for 10% of the entire US residential solar market in 2028.
Critical to Puerto Ricos future success with residential solar is a law that extended the territorys net metering policy for solar energy through 2031. However, that law, known as Law 10-2024, has been challenged by the Financial Oversight and Management Board (FOMB) of Puerto Rico, an organization created by federal law.
The FOMB stated in a letter that the fiscal plan it certified for Puerto Ricos legacy utility, known as PREPA, requires the Puerto Rico Energy Office to determine whether to make changes to the net metering system. Because the Energy Office has not yet done so, the FOMB said Law 10 is “directly at odds” with PREPAs fiscal plan.
The FOMB included with the letter its resolution ordering the legislature and governor of Puerto Rico to repeal Law 10 or amend it “in a manner consistent with fiscal plans.”
Positive Impact
Wilson said that residential solar net metering “not only does not have a negative impact on Puerto Ricos finances, but it has a positive impact.”
Supporting this claim, SESA-PR published a report that assessed the financial value of net metered solar energy in Puerto Rico at $0.33 per kWh, substantially more than the net metering credit of $0.24 per kWh. The value of solar is primarily due to avoided energy costs of $0.27 per kWh, with additional value from avoided transmission and distribution costs and avoided reliability-related economic losses.
The report has been prepared by the consulting firm Gabel Associates.
All of the net metering laws in the country,” Wilson said, “were created by local legislatures and local governors signing into law.” And the same thing happened in Puerto Rico in 2009. In 2019, there was a five-year extension of that law. That was legal. And in January, there was another seven-year extension to the law, which this single federal agency opposes, three months after the law went into effect.”
Noting that the FOMB was created to resolve the debt problems of PREPA and other entities in Puerto Rico, Wilson expressed his hope that once the government of Puerto Rico presents its response to the FOMB letter, it will change its position and focuses on PREPA, “the only agency whose debt is not paid.”
PREPA debt has been “negotiated to less than $3 billion from more than $11 billion,” Wilson said. “It seems clear that PREPAs debt will be settled,” and “the supervisory board needs to focus exclusively” on that “until it is done.”
Wilson said the FOMB was established by federal law as a temporary entity “to help resolve all debt and then dissolve,” and that the oversight board has a federal mandate to support Puerto Ricos economic growth. Estimating annual revenue from Puerto Rico’s residential solar-plus-storage market at $1.5 billion, Wilson expressed hope that the oversight board “will dissolve as soon as possible while supporting Puerto Rico’s economic growth along the way.” |
