Solar Energy

Main applications

Residential and commercial self-generation, residential and commercial water heating, solar-powered air-conditioning.

Solar Energy Background

Data from the GEF-supported Solar and Wind Energy Resource Assessment (SWERA) indicate that the solar irradiation resource in the Caribbean is in the range of 4.5 to 6.5kWh/m2/day, which is highly favorable for PV and solar thermal applications. As a comparison, the level of this resource in Germany is in the range of 2.5 to 3.5kWh/m2/day. Paradoxically, Germany has the greatest number of solar electricity installations in the world, while the Caribbean’s status in solar electricity installations is insignificant.

However, the landscape for the solar market is different when solar thermal application (for water heating) is considered. The Caribbean, based on innovation that began in Barbados in the 1970s, is now a world leader in the development and utilization of solar water heating technology, with an installed capacity across CARICOM of 170 MWth – equivalent to more than the peak electricity demand of Barbados and St Lucia combined.

Opportunities in solar energy

Apart from its abundance, several factors make solar energy an attractive option for the region. The most important is the high retail price of electricity in the region. Except in Suriname and Trinidad & Tobago, where electricity costs are subsidized, prices of electricity in the rest of the Caribbean are among the highest in the world, with prices approaching (and sometimes exceeding) US$0.40 per kWh.

Source: CARILEC Tariff Survey, authors’ calculations

The very low maintenance requirements associated with solar PV and water heating systems is an advantage in a region where most necessary materials and components must be imported. Conversely, the high initial investment costs associated with PV installations, coupled with unclear or ad-hoc grid interconnection policies, have been a critical barrier to the widespread adoption of PV in the Caribbean. However, the cost of PV modules has fallen from US$7 per peak Watt (Wp) in the early 1980s to less than $1 per Wp today, and other associated hardware costs are also falling. Real opportunities now exist for solar entrepreneurs to deliver economically viable, distributed, grid-connected energy supplies to homes and businesses throughout the region.

The market opportunity for solar cooling in the region is just beginning to be recognized and the region’s first commercial solar cooling installation was commissioned in 2012 at the Kingston, Jamaica headquarters of mobile phone company Digicel. It was installed by RED, a Jamaican renewable energy development firm.