Rain Or Shine

Economic growth, averaged at 5.7% over the last two decades, along with a population increase, have led the Dominican Republic to a rise in electricity demand. The country, which still relies on fossil fuels, mostly diesel and gas, has already addressed the necessary steps towards reducing its dependence on costly imported energy and is now developing several renewable energy projects.

In 2007, the Renewable Energy Law 57-07, which grants investors several incentives, such as tax exemptions and a feed-in-tariff (FiT), entered into force. Besides that, the Dominican Republic is involved in the international climate change negotiations. In August 2013, the country became a member of the Green Climate Fund Board, and is represented by Pedro Garcia Brito. The country aims to obtain 25% of its energy from renewable power sources by 2025, and to reduce the carbon emissions by 25% (from 2012 levels) by 2030.

However, according to the Worldwatch Institute’s sustainable energy road map, even with the strong support for the development of renewable sources in the Dominican Republic, there are still a few notable obstacles that the country needs to overcome. First of all, the Dominican Republic’s grid system has one of the highest rates of distribution losses in the world. Power outages which are still a daily reality throughout the Dominican Republic, are one of the main obstacles to the country’s further development. The second problem is related to an excessive bureaucracy; currently, green energy project developers need to go through a several stage, long lasting process in order to obtain a renewable energy license. Thirdly, the majority of local developers lack the capital necessary to undertake renewable energy projects. Moreover, the terms offered by Dominican banks are no more favorable than those offered to investors developing conventional power projects. In the words of Mark Konold, Worldwatch’s Climate and Energy Caribbean project manager, “The Dominican government has already put in place some strong mechanisms to promote renewables growth, but it is currently not utilizing them to their potential.”

THEY ALREADY DO IT

Several private Dominican enterprises are developing their own renewable energy projects, in order to reduce the costs and put an end to blackouts, a regular feature of the Dominican Republic’s daily life, constricting business’s performance for many years.

One of the most active green energy project developers, supporting the Dominican companies in achieving better performance is Sofos Dominicana, a Spanish enterprise which commenced its operations in the Dominican Republic in 2010. Over its four years of operations, Sofos has been engaged in solar energy projects for companies such as Frederic Schad, Industrias Aguayo, BHD Bank, and Hotel Dominican Fiesta, among others.

Schad’s rooftop solar panel array consisting of 2,048 panels, with an installed capacity of 501.76 KW cuts CO2 emission by 380,000 kilos generating around 750,000 kilowatt-hours (kWh) per year. Industrias Aguayo’s array consisting of 2,208 panels with an installed capacity of 552 KW, generates approximately 825,000 kWh annually. According to Sofos Dominicana’s CEO, Ignacio Garcí­a Vilches, companies which invest in solar energy for their own consumption obtain significant savings, and “will greatly increase their competitiveness in the short-term.”

Up to date, the largest solar project developed in the Dominican Republic is the project at Cibao International Airport in Santiago de los Caballeros, Dominican Republic’s second largest metropolis. GT500 MVX grid-tie solar inverters for 1.5 MW provide the Cibao International Airport with clean energy for approximately 50% of its total energy needs. In the words of Cibao International Airport’s Board Chairman, Felix Garcia Castellanos, this solar power plant is one of the “most economical” ways to deal with the nation’s dependence on “costly and polluting” imported fossil fuels.

Public authorities have also addressed the energy issue. The Dominican Republic’s National Energy Commission leads by example and uses Net Metering in order to reduce monthly expenses and protect the environment. Besides that, the Commission provides surplus renewable energy to the grid, reducing the city’s total amount of energy based on fossil fuels.

REFORMS MAKE IT

The Dominican Republic, with a stated goal of obtaining 25% of its energy from renewable sources by 2025 has a real opportunity to renovate its floundering electricity sector. The government has already put renewables at the center of future planning and introduced several mechanisms to promote renewables growth. Besides the Renewable Energy Law 57-07, in 2011, the government implemented a net metering provision allowing customers to take advantage of solar photovoltaic (PV) technology in order to reduce their electricity bills. A law to incentivize the growth of renewable energy has been passed. The regulation which waives import duties for renewable energy equipment, allows the writing off of 75% of tax on electricity sales for 10 years, making the tax on equipment deductible by up to 75% for the same period.