Puerto Rico currently generates an estimated 70 percent of their electric energy from fossil fuels. Due to the rising cost of fossil fuels and compounded by concerns over climate change, Puerto Rico has realized that they have an obligation to promote healthy economic development and a healthy environment. Puerto Rico’s Constitution supports the development of new clean energy sources as it says the country needs to do what it can to conserve all natural resources. Because rising energy costs all affect the effectiveness of Puerto Rico’s economic competitiveness, the country is doing what it can to undergo a “cleantech revolution.”
1 ) Puerto Rican Incentives for Renewable Energy. Puerto Rico, in an effort to make the switch to renewable energy for affordable to businesses and residents, has created a number of financial incentives for renewable energy. This includes the Industry Recruitment/Support Economic Development Incentives for Renewables, a Tax Deduction for Solar and Wind Energy Systems, a Property Tax Exemption for Solar and Renewable Energy Equipment, an Excise Tax Exemption for Farmers and a Sales and Use Tax Exemption for Green Energy, and a number of State Rebate Programs, such as the Agricultural Renewable Energy Rebate Program and rebate programs for sun energy, wind energy, and solar water heaters.
2 ) Large Wind Project Announced to State Renewable Energy Revolution. In 2010, the first commercial wind turbines will be put up, raising above the palm trees. Although it has been a slow process to start putting them up, such as permit problems and environmentalists worried about migratory birds, wind turbine popularity is picking up speed. The Bacardi factory on the island has successfully put up wind turbines and there is a $215 million, 100 megawatt wind farm that will be built within 2011.
3 ) Renewable Energy Companies in Puerto Rico. Puerto Rico houses a number of renewable energy companies around the country. Sun Pro PR, Inc. specializes in solar systems design installation and also sales, including photovoltaic systems, DC to AC power inverters, solar street lighting, and solar panels mounting systems. Tucasaverde.com Inc. works with energy and water conservation, including assisting with building energy efficient buildings and homes, energy efficient lighting and appliances, LED lighting, rainwater collection systems, and energy audits. Apollo Renewable, Inc. works on the installation of solar, wind, geothermal, and hydrogen fuel cells for power and backup.
4 ) Governor of Puerto Rico Signs Renewable Energy Legislation. In 2010, Governor Luis G. Fortuno signed a new renewable energy legislation. Known as the Alternative Renewable Energy and Green Energy Incentives Act, it set very explicit renewable energy production goals as well as a number of economic incentives that will further facilitate investments necessary to obtain these objectives. This law also creates renewable energy certificates as a primary financial mechanism to achieve the renewable energy goals. Another law was put into effect that lists short, medium, and long term economic incentives to promote the creation of a new, solid renewable energy industry.
5 ) Puerto Rico Sets Electricity Target for 15 Percent by 2020. By the year 2020, Puerto Rico wants to have a minimum of 15 percent of its total electricity generated by renewable energy sources. By 2028, the percentage is to go up to 20 percent. Some of the incentives created to reach these goals is the creation of the Green Energy Fund which as $290 million to use on renewable energy initiatives and projects throughout ten years. There will also be a number of cash rebates, including 60 percent for residential project costs and 50 percent of business costs to install renewable energy systems that have up to one megawatt in output. There are also a number of tax credits as well. The governor said, “We need to aggressively encourage the development of renewable energy sources for the benefit of all that reside and work in Puerto Rico. Establishing the right public policy will be the anchor to make it happen.”
6 ) Puerto Rico Renewable Energy Landfill Project. There are a large number of landfills that the Environmental Protection Agency gave a closure order to and show increased potential to become renewable energy sources, including landfill gas to energy. The Puerto Rico Renewable Energy Landfill Project will assist in offsetting the costs to close energy as the energy that is produced may be utilized for landfill maintenance and operation, and any surplus energy may be sold to the utility grid. Using the methane gas for renewable energy will also decrease the landfill’s carbon footprint.
7 ) Puerto Rico Received $34 Million in Federal Stimulus Money. In 2009, Puerto Rico received $34 million from the federal stimulus money to decrease greenhouse gas emissions and become more energy efficient. According to Pedro Pierluisi, the federal money is to be used to reduce fossil fuel dependency and promote the use of clean energy. For example, the capital of Puerto Rico, San Juan, is receiving $4.3 million of the stimulus money. The state-owned power utility is going to use some of the money to increase investment into wind, wave, sun, and other forms of alternative energy.
8 ) Puerto Rico Gains Photovoltaic Farm from Western Wind. In 2011, Canadian company Western Wind Energy Corp. signed a 20 year purchase agreement along with the Puerto Rico Electric Power Authority and a 40 year land lease deal with the Puerto Rico Land Authority for 401 acres in the Yabucoa municipality. Prior to this solar photovoltaic plant, the largest plant in Puerto Rico was for 265 kilowatts. However, aside from the 30 megawatt Western Wind project, there are two other solar photovoltaic plans under construction for 63 megawatts and 20 megawatts.
9 ) Renewable Energy Incentives Act. There are a number of companies in Puerto Rico that have become devoted to producing renewable energy on a more commercial scale, and the new Incentives Act was created to assist these companies. This includes income, property and municipal tax exemptions, super-depreciation for buildings, machinery, structures, and equipment, as well as eligibility for a number of tax credits related to the utilization of products manufactured locally, job creation, and research, development and innovation.
10 ) Walmart and Sam’s Club Use Solar Energy in Puerto Rican Store. In 2011, Walmart made the announcement that it will be deploying rooftop solar panels at three Walmart and two Sam’s Club retail locations across the island. The solar panel project was made through a partnership of Sun Edison, a company in charge of designing, deploying, operating, and maintaining over three megawatts of solar technologies throughout the five buildings. The energy generated via the solar panels will offset the current demand from the local grid and allow for energy savings.
Article by Shawn Lesser, Co-founder & Managing Partner of Atlanta-based Watershed Capital Group – an investment bank assisting sustainable fund and companies raise capital, perform acquisitions, and in other strategic financial decisions. He is also a Co-founder of the GCCA Global Cleantech Cluster Association ”The Global Voice of Cleantech”. He writes for various cleantech publications and is known as the David Letterman of Cleantech for his “Top 10″ series. He is also author of The 2012 Cleantech Directory. He can be reached at shawn@watershedcapital.com.
