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October 7, 2022

Distributed rooftop solar and battery storage will ensure reliable and affordable electricity for all Puerto Ricans

Puerto Rico receives an abundance of sunlight year-round that can generate more than enough energy to meet demand.

Volunteers install a solar power system in the home of community member in the Puente de Jobos neighborhood of Guayama, P.R., on Mar. 20, 2021.
Volunteers with the group Comunidad Guayamesa Unidos por tu Salud install a solar power system in the home of community member in the Puente de Jobos neighborhood of Guayama, P.R., on Mar. 20, 2021. (Erika P. Rodríguez for Earthjustice)

Two weeks after Hurricane Fiona hit Puerto Rico on Sept. 17, 2022, at least 23 people have died and more than 100,000 homes and businesses are still without power.

Puerto Rico’s obsolete and fossil fuel-dependent electric grid will continue to fail as the climate crisis creates more frequent and intense natural disasters.

Restoring a grid that depends on centralized oil, gas and coal power plants concentrated in the south, with vulnerable long-distance transmission lines to carry that power all over the archipelago, will continue to cause power crises all over the archipelago after every major storm.

Distributed rooftop solar and battery storage is the only viable, safe, and sustainable solution to this crisis.

The Biden administration must ensure that billions of dollars in unspent federal aid from the Federal Emergency Management Administration and the U.S. Department of Housing and Urban Development are utilized to install distributed rooftop solar and battery storage on residences and commercial buildings across Puerto Rico.

Why is electricity in Puerto Rico so expensive and unreliable?

Reliance on imported fossil fuels; aging, inefficient infrastructure; debt

Puerto Rico’s median income is one-third that of the 50 U.S. states, yet Puerto Ricans pay significantly more than the average cost of electricity in the states. This is primarily due to two underlying factors:

  1. The archipelago’s electricity system relies on importing expensive fossil fuels to power aging, inefficient generators, and
  2. Its public electric utility is billions of dollars in debt.

Puerto Rico’s Electric Power Authority (PREPA) filed for bankruptcy following Hurricane Maria in 2017, and ceded control of electricity transmission and distribution to LUMA Energy, a private company, in 2021.

A year after LUMA signed its 15-year, $1.5 billion contract, increased rates and worsened outages have sparked widespread discontent with the company among Puerto Ricans and members of Congress.

The source of PREPA’s debts stems from its shrinking customer base as Puerto Rico’s population has declined by 16% between 2004 and 2020.

  • Yet the enormous wholesale costs of its imported oil and natural gas have not decreased, resulting in substantially higher retail rates for customers.
  • Puerto Rico currently relies on fossil fuels for 97% of its electricity generation, almost half of which comes from natural gas (44%), followed by oil (37%), and coal (17%).
  • Price spikes caused by changing global economic and supply conditions — for example, the war in Ukraine — exacerbate the high prices of those fuels.

Puerto Rico’s power plants are all at least fifty years old and lack critical efficiency updates, are connected to an aging centralized grid which relies on transmission lines that crisscross dense forests and hills to deliver electricity to people’s homes.

  • The plants’ generators and transmission lines cannot withstand severe weather and are frequently failing, causing island-wide blackouts that shut down critical infrastructure such as drinking water pumps, hospitals, and life-saving medical equipment.
  • In 2017, Hurricane Maria destroyed much of the island’s electricity infrastructure, levelling 80% of all transmission lines. Nearly 3,000 people lost their lives, and it took 11 months to restore power to everyone who had lost it.

While most Puerto Ricans, relying on the battered electricity grid, lost power when Hurricane Fiona hit, those with rooftop solar and battery storage did not lose access to electricity.

  • Yet despite the repeated failures of Puerto Rico’s centralized fossil fuel-based electricity system, in 2021, PREPA released a 10-Year Infrastructure Plan that proposed spending up to $10 billion in federal funding to prop up the existing centralized system, including new natural gas infrastructure.
  • No funding was allotted towards renewable energy and battery storage.

Why is distributed rooftop solar and battery storage the solution?

Generate power during the day; use battery reserves when the sun goes down

Puerto Rico receives an abundance of sunlight year-round that can generate more than enough energy to meet demand.

  • In 2020, the National Renewable Energy Laboratory found that Puerto Rico’s solar energy potential from residential rooftop solar panels was 24.6 TWh, which is over four times the level of the island’s residential electricity consumption.

Installing solar panels and sufficient battery storage on residents’ rooftops allows them to generate their own power during the day and use the battery reserves when the sun goes down.

  • Distributing the energy generated by nearby residents’ panels throughout their neighborhood creates decentralized, local micro-grids, eliminating dependence on island-wide transmission lines that run for hundreds of miles.
  • The decentralized nature of this system makes it much more resilient to extreme weather, since shorter transmission lines are less likely to be damaged and a failure of a few lines will not result in system-wide outages.

A distributed rooftop solar system empowers lower income residents to take advantage of solar energy’s benefits.

  • Fifty percent of Puerto Rican residents are considered low-to-moderate income earners, but the expensive upfront cost of solar has created barriers to the technology’s widespread adoption beyond higher-income residents who own individual houses.
  • By using federal funds to pay for the installation of solar and storage on every residential space in Puerto Rico, renters and others who cannot afford to install solar can share the economic, environmental, public health, and reliability benefits of solar generated electricity.

How much federal aid is available for Puerto Rico’s post-Maria recovery?

$28 billion total — $12 billion for energy sector recovery

FEMA allocated $28 billion for Puerto Rico recovery efforts after Hurricane Maria, of which 19% has been spent. However, the majority of this aid has gone to debris removal, not restructuring the electricity grid.

There is approximately $12 billion in federal aid specifically allocated for Puerto Rico’s energy sector recovery following Hurricane Maria.

This aid is provided by FEMA and HUD. The funding is broken down into the following:

  • $9.5 billion in FEMA public assistance for restoration and hazard mitigation for disaster-damaged public utilities.
  • $832.5 million from the FEMA Hazard Mitigation Grant Program to improve the resilience of disaster damaged or undamaged facilities.
  • $1.9 billion from HUD’s Disaster Recovery: Electric Grid, for unmet needs after FEMA funds, insurance, and other federal or private sources are accounted for. This funding is meant to mitigate risks and improve resilience, sustainability, and financial viability for electrical power systems.

The $10.3 billion in FEMA aid is directed to Puerto Rico’s Electric Power Authority (PREPA), while the $1.9 billion in HUD aid is directed to the Puerto Rico Department of Housing (PRDOH).

How much of this aid has already been dispersed?

Only $1.6 billion of the $12 billion in aid

As of 2021, only about $1.6 billion of the $12 billion in aid has been dispersed. This leaves about $10 billion in unspent aid available.

Financial analysis estimates it would cost $9.6 billion to install distributed rooftop solar and battery storage on every individual house and apartment building on the archipelago.

This leaves about $400 million for urgent distribution system upgrades.

How much would it cost to install distributed rooftop solar and battery storage on every home in Puerto Rico?

$9.6 billion in 15 years

Analysis published by the Puerto Rico organization Cambio and the Institute for Energy Economics and Financial Analysis (IEEFA) found it would cost $9.6 billion to install 2.7 kW of solar PV and 12.6 kWh of battery storage on every residential home and apartment building in Puerto Rico within 15 years.

This would add 2700 MW of power to the electric grid, enough to provide over half of the electricity needed to meet 75% of Puerto Rico’s total electricity demand.

Adding in solar installations on commercial rooftops and parking lots would allow the archipelago to reach 75% electricity generation from renewable sources by 2035, well ahead of the government’s existing target of reaching 60% by 2040.

In addition to the more than 70% reduction in carbon dioxide emissions, this would drastically cut PREPA’s annual expenses on imported fossils fuels from $1.4 billion to $430 million. These cost savings and reduced dependency on fossil fuel price fluctuations will ultimately reduce both customers’ electricity rates and rate fluctuations while ending the emission of greenhouse gases to produce electricity.

Why is distributed rooftop solar advantageous to a centralized grid for Puerto Rico?

Avoids long-distance transmission lines, preserves open space

A distributed rooftop solar system is a network of solar panels on the roofs of residential homes, apartments and office buildings, creating a network of “micro-grids” which do not rely on vulnerable long-distance transmission lines, as a centralized electricity grid does.

Placing solar panels on rooftops also saves Puerto Rico’s scarce open space, which is critical for biodiversity and agriculture. Puerto Rico should also consider solar panels in parking lots, brownfields, or closed landfills.

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