Tiny drops create mighty oceans: how distributed solar keeps the Puerto Rico grid afloat

For many of us active in the energy industry, when we think about solar, we think about the vast arrays of panels covering acres and acres of land. Unsurprisingly, the growth of the US solar industry is - and will continue to be - mainly driven by the utility-scale segment. In our latest US Solar Market Insight Report, we estimate that the utility-scale segment will lead the solar industry, with almost 70% of the capacity built in the US over the next 10 years.  

However, many markets follow a very different dynamic. Regions with weak transmission infrastructure and an ageing generation fleet tend to advance distributed generation (DG) resources. These factors, in addition to favorable DG policy by local utilities, contribute to higher penetration of behind-the-meter solar resources. One of these markets with high expected DG penetration is Puerto Rico. 

More than 90% of solar capacity in Puerto Rico will come from distributed resources 

While the utility-scale market has gained some traction over the past few years, the distributed segment will largely drive solar growth in Puerto Rico. We forecast that more than 5. GW of solar capacity will be installed in Puerto Rico over the next 10 years. Yet, only 440 MW will come from the utility-scale segment. Low investment in transmission infrastructure, slow permitting processes, challenged site availability, and limited grid resiliency limit the expected growth of the utility-scale segment. 

The distributed generation segment, conversely, is in a much brighter place, as there are tools and incentives to drive installations on the island. From a policy standpoint, Laws 17, 57, and 114 of 2014 govern and protect distributed generation in Puerto Rico. These policies allow behind-the-meter (BTM) renewable projects up to 1 MW to be connected to the grid, establish a net metering mechanism, and regulate interconnection tariffs and timeframes.

The local utility, LUMA, has a robust net metering program, allowing all clients to submit an interconnection request online. By law, any requests must be finalized in 30 business days, a very competitive timeframe compared to many areas in the US. Moreover, strong federal incentives will continue to enable DG installations, with up to $1 billion  destined to increase residential solar + storage installations by companies like Sunnova and nonprofits like Let’s Share the Sun.  

Rooftop solar and storage’s impact goes beyond no-carbon electricity  

Distributed generation is an excellent mechanism on its own to help reduce load and increase the penetration of clean energy resources. In Puerto Rico, DG is a multi-pronged solution to many of the citizens’ issues with energy security and the environmental impact of its generation fleet.  

• The high intensity and frequency of hurricanes, combined with weak transmission and distribution grids, expose Puerto Ricans to outages that may last weeks. Rooftop solar helps provide resiliency to the grid and energy security to families.  
• Increased DG penetration helps reduce Puerto Rico’s dependence on imported (and polluting) fossil fuels. According to the EIA, more than 97% of the island’s electricity generation is thermal, making Puerto Rico vulnerable to volatile fuel prices, particularly during natural disasters. 
• The rise of DG in Puerto Rico results in economic growth and job creation. According to the Interstate Renewable Energy Council’s Solar Job Census, solar has already helped create more than 2,000 jobs, providing more than 20 jobs per capita. 

Rooftop solar and storage will continue to grow in Puerto Rico, and many more people will benefit from clean energy, energy security, and resiliency against natural disasters. Puerto Rico is a nice microcosm showcasing a trend that may be adopted and easily replicated all across the globe. 

Wood Mackenzie and Let’s Share the Sun are transforming the way we power Puerto Rico – and you can too 

This week, six Woodmackers will be in Adjuntas, Puerto Rico installing solar panels and energy storage systems on homes affected by natural disasters. The group will be part of a broader delegation coordinated by Let’s Share the Sun.

Click here to learn more about Wood Mackenzie’s work with Let’s Share the Sun. To support Let’s Share the Sun's mission of providing energy to those most in need, you can donate here.