A 64 megawatt (MW) solar plant is under construction in the Dominican Republic, the country’s first large-scale solar park.
German developer Wirsol says the first half comes online this year. Electricity will be sold to the state-owned utility.
Until now, the island’s biggest solar system has been a mere 100 kilowatts – on the roof of a water purification and bottling plant. But population – and with it, energy demand – is rising, so like many Caribbean countries which have strong solar potential, it is looking to rely less on expensive fossil fuel imports.
Wirsol’s plant under construction:
What’s been holding solar back?
Dominican Republic has a stated goal of cutting carbon emissions 25% by 2030 (from 2012 levels) and getting 25% of energy from renewables by 2025.
To back that up, it has a strong national Renewable Energy Law with progressive policies such as a feed-in tariff, net metering, a national fund for renewable energy and financial incentives.
The law waives import duties for renewable energy equipment, allows companies to deduct 75% of the sales tax from sales of renewable electricity for 10 years, for example.
To boot, Dominican Republic’s solar resource is 50% greater than Germany’s.
These strong policies, however, face equally powerful constraints: an antiquated grid and layers of bureaucracy that force developers to make their way through 14-steps to get permits, according to Worldwatch Institute. Besides that, local developers lack capital and have difficulty getting favorable bank loans. Transport and logistics to and on the island are also very difficult.
The biggest constraint, however, seems to be a resistant-to-change mindset. "Sadly, however, decision makers are reverting to choices that only entrench the country’s fossil fuel dependence. The government chose to remove the law’s fiscal incentives to collect more revenue. After serious backlash, they settled on reducing the sales tax write-off from 75% to 40%. Another questionable move is the government’s decision to install 1,200 MW of new coal-fired generation to replace an equal amount of outdated fuel-oil generating capacity. The government is also considering exploration of the island and the surrounding waters for oil and gas resources it might be able to exploit," says Konold.
Read Konold’s blog post, Opportunity Knocks: Reforming the Dominican Republic’s Energy Sector:
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