Solar power boom – High electricity costs, lower solar panel prices driving alternative energy business

WITH electricity rates at an all time high in Jamaica, the domestic solar energy market appears to be gaining momentum.

“The last year has been fantastic, and the reason for that is that finally we are getting more and more of an environment where people see energy prices going up and don’t see anything changing very rapidly,” said Maikel Oerbekke, principal of Renewable Energy Developers (RED), a Montego Bay-based company that develops and implements solar energy projects primarily for commercial clients.

A photovoltaic panel.
LYN… residential market will drive growth
Gareth Downing, marketing and sales agent of FosRich Company, points at the firm’s two types of solar water heaters — the tubular and flat bed panel. (PHOTOS: KARL MCLARTY)
Icon Renewables proprietor Moses Chybar with a solar dusk to dawn flood light, which can run for up to 12 continuous hours, at the Jamaica Alternative Energy Expo hosted by the US Solar Institute at the Pegasus hotel.

RED, which specialises in solar photovoltaic (PV) technology from German total system company Schuco, and solar cooling and solar process heating plants from Austrian solar engineering firm SOLID, lists Jamaica Broilers Group and telecommunications giant Digicel among its customers.

Oerbekke, speaking with the Business Observer on Monday at the Jamaica Alternative Energy Expo hosted by the US Solar Institute at the Pegasus hotel, reasoned that locals now more than ever feel “strangled” by the electricity prices of monopoly provider Jamaica Public Service Company (JPS), which recently applied to the Office of Utilities Regulation (OUR) for a 10 per cent increase on re connection fees.

“People are saying ‘we have our backs against the wall and we need to do something now’,” he said, explaining the growing interest in solar energy as attendees crowded the expo to view and gather information on some of the latest systems.

RED has done more than US$3 million ($297 million) worth of projects in the last nine months, revealed Oerbekke. Its biggest project to date has been the solar PV and solar cooling system it did for Digicel at the telecoms’ new downtown Kingston headquarters, he said.

In anticipation of growing clientele, RED is awaiting approval from the St James Parish Council to construct a 3,000-square-foot showroom and administrative building in Montego Bay that can stock around 1,500 panels.

“So, we will be even more faster and flexible,” said Oerbekke, noting that “A third of the building will be a showroom and the building will be completely powered by solar.”

Indeed, the Jamaican solar market has evolved dramatically over the last decade, said Damian Lyn, the managing director at Alternative Power Sources, one of the pioneers in the industry.

“When we started 10 years ago, we were told the company would not survive; it had just cost too much to install a system,” said Lyn. “But we stuck with it and it has gone strength by strength overtime.”

Lyn, a former president of the Jamaica Solar Energy Association, said a huge drop in solar panel prices over the years has been a major catalyst behind the industry’s boom.

“When we started in business, we were selling at US$7.50 a watt, now we are below US$1.50 a watt,” said Lyn.

Furthermore, Lyn said Jamaicans are way more educated now about solar than they were in the early 2000′s.

“They understand the difference between solar water heaters and PV systems etc, and the savings that they can have,” he said.

Jamaica has an abundance of sunshine, an average of 3,000 hours a year in Kingston, although that falls by a quarter in more mountainous parts of the island, which tend to have heavier cloud cover.

Photovoltaic power generation uses solar panels composed of a number of solar cells containing a photovoltaic material. Photovoltaic cells convert sunlight into electrical energy, which is subsequently stored in a bank of batteries.

Rooftop panels, which could last for 25 to 30 years, will now pay for themselves in as low as four years, said Lyn, noting that the pay back for a battery-based system is six to eight years, and four to five years for one that is grid tied. Until recently, the pay-back period was up to 20 years.

Some say that changes to the regulatory framework has also had a positive impact on the uptake of solar power, with solar electric customers now able to offset their costs by selling back to the JPS, following the implementation of net billing last year. Net billing customers are paid the avoided cost of generation for the electricity JPS purchases, as well as up to a 15 per cent premium on that price.

Meanwhile, several organisations and businesses have switched to solar power, including Sandals Resorts International, which announced in November 2011 that it had teamed up with Panasonic to launch the region’s first ecovillage hotels. The company hopes to turn a profit on its investment in seven to eight years, said its CEO, Adam Stewart.

What’s more, Grace Kennedy subsidiary Dairy Industries is reportedly going with a 60-kilowatt solar system shortly and Lyn himself is currently installing a 100 kw system for the American International School of Kingston.

Still, the Alternative Power Sources boss said he hopes to see more corporate entities getting involved in solar energy.

“A lot are still skeptical  I think, on the corporate end, they still don’t fully understand the paybacks, while the residential person who feels it more, knows it,” he said.

Against that background, Lyn feels the residential market — which pays the higher rates — will drive the growth in the market.

Businesses are taking notice and are moving fast to tap into the growing alternative energy market.

Appliance Traders Limited recently set up an energy solutions division, providing solar water heating systems, photovoltaic panels, inverter batteries, pool pumps, LED lights, smart thermostats along with other energy-saving and eco-friendly devices.

FosRich Company Limited made a similar move two years ago which has proved to be a resounding success, Gareth Downing, a FosRich marketing and sales agent, told the Business Observer at the expo.

“We really saw a need for alternative energy solutions. We had the lighting and were offering energy-saving bulbs, but people wanted more than just energy saving bulbs, they wanted a complete solution,” said Downing.

FosRich offers, among other items, LED bulbs, solar PV systems and two types of solar water heaters — the tubular and flat bed panel.

Installation included, a 40- gallon flat bed panel water heater would cost around $120,000, while the tubular water heat would run about $85,000.

“They both have their advantages,” said Downing. “Aesthetic wise, a lot of people go for the tubular water heater, for durability people go for the flat bed panel.”

A lot of firms even offer financing to help customers with the high upfront costs of solar systems, confident that they will get there money back from the savings realised by clients.

“We take a 50 per cent deposit and work out a time frame for payment,” noted Icon Renewables proprietor Moses Chybar, who has been an entrepreneur since 1992, but only went into alternative energy a couple years ago.

Icon Renewables offers anything from LED lights to solar inverter air conditioning units.

The growth in solar energy also bodes well for the job market in a country plagued by high unemployment levels.

To this end, Alternative Power Sources has partnered with Vector Training Institute to offer an installers course in Jamaica, certified by the Association of Electronic Technician in the US.

“We want to empower Jamaicans because we don’t intend to install every single system in Jamaica ” Lyn said, noting that one can actually sit the US exam in Jamaica.

“So even someone who gets the opportunity to migrate, can go abroad and get a job in this field.”

BY JULIAN RICHARDSON Assistant Business Co-ordinator