Solar power comes of age in Jamaica

(Jamaica Observer) Solar power has finally become a viable option, driven by falling prices for photovoltaic panels and the soaring cost of oil, say proponents of the alternative energy.

Rooftop panels, which could last for 25 to 30 years, will now pay for themselves in just six or seven years, claim advocates. Until recently, the pay-back period was up to 20 years.

The cost of solar cells has fallen by as much as 49.5 per cent since the start of 2011, according to the PVX spot market index, which tracks the monthly wholesale costs of the industry.

“China is manufacturing dirt-cheap panels,” said Roger Chang, president of the Jamaica Solar Energy Association. “Most of the companies that made solar panels in the US have moved their manufacturing to China.”

The other main factor is the high cost of oil, currently US$102 (J$8,800) per barrel.

“It’s a win-win if you get into solar … so long as the price of oil is above US$100,” said Curtis Deenah, a technical information officer at the Scientific Research Council. “It’s a matter of market conditions; You never know what’s going to happen there.”

Oil prices peaked in 2008 at US$147, but as recently as 2009, in the depths of the global recession, they fell to around US$30 a barrel.

Several organisations and businesses have already switched to solar power, most recently, Sandals Resorts International, which announced in November that it had teamed up with Panasonic to launch the region’s first ecovillage hotels.

The company, which belongs to the same group as the Jamaica Observer, hopes to turn a profit on its investment in seven to eight years, said its CEO, Adam Stewart.

ATL, another member of the group, recently set up an energy solutions division.

Jamaica is blessed with abundant sunshine, an average of 3,000 hours a year in Kingston, although that falls by a quarter in more mountainous parts of the island, which tend to have heavier cloud cover.

The regulatory framework is the main remaining barrier to broader uptake of solar power.

Under the “net billing” rules now being finalised, small residential producers could feed power to the JPS grid, but the price they would receive, some US10c/kWh, is a fraction of what they currently have to pay to draw down electricity, around US40c/kWh.

Commercial producers tend to do better, since they generally use more electricity during the daytime, whereas residential producers need more power after the sun goes down.

The new rules will also deal with wheeling — the cost a company would have to pay for transmitting electricity through the grid from its solar power generators at one location to its commercial or industrial operations elsewhere.

The Office for Utility Regulation is awaiting final input from JPS, but is so confident of the new rules that small producers can already make applications, said Ambassador Peter Black, a consultant to the watchdog agency.