(CNS): Both the Utility Regulation and Competition Office (OfReg) and Caribbean Utilities Company have begun separate and independent studies to gather evidence on a price that is fair for solar providers and for customers as the Cayman Islands inches towards a much-needed expansion of alternative, renewable fuel supplies. But in the face of the current energy and climate crisis, the regulator is advising people not to install solar panels until these studies are finished and the new CORE and DER programmes have been rolled out by CUC and approved by OfReg.

The two studies are expected to be completed by the end of November 2022. Once both parties have reviewed the studies, the new iteration of the Consumer Owned Renewable Energy (CORE) and Distributed Energy Resource (DER) programmes will be announced.

In a press release issued Friday, OfReg said both studies would ensure the cost of solar electricity purchased from customers with distributed generation renewable energy systems is fairly priced and reasonable to be passed on to other customers on the grid. But OfReg also said customers should be cautious when ordering new solar systems and remain patient until the new structure and payment guarantees are in place.

“Some solar installers are selling solar to customers without having access to a programme which has been approved by the regulator and the grid owner,” the regulator stated in the release.

It added that the future CORE programmes might have different energy rates than those currently being charged, and customers should consider that a return on investment cannot be estimated until the new rates are determined. Those rates are unlikely to be determined until later next year, further adding to what has been years of delay in making any meaningful move in the Cayman Islands towards using solar to generate electricity.

Gregg Anderson, OfReg’s Executive Director of Energy, said the approved programmes are designed to provide opportunities for customers to install rooftop solar systems. They allow customers to connect small-scale solar systems or wind turbines to CUC’S distribution system and to reduce their monthly energy bills by generating their own electricity while remaining connected to the grid.

“However, there are a lot of issues at play in terms of essential costs to maintain and protect the local grid’s reliability and stability,” Anderson said. “These include determining an appropriate cost of service for utilities, the full ‘value of solar’, which will potentially determine the rate at which solar customers are credited, amended CORE and DER agreements and utility concerns about potentially losing revenue.”

Anderson added that the OfReg study was critical to understanding the costs and benefits of solar so that the national energy policy is based on an accurate perception of the value of solar energy.

“OfReg acknowledges that rooftop solar electricity generation is an integral part of the National Energy Policy (NEP) energy transition goals and is taking the necessary steps to support strong solar growth,” he said.

CUC’s VP for Customer Services & Technology Sacha Tibbetts said CUC has always been committed to bringing solar energy into the mix, as stated in its Integrated Resource Plan.

“The IRP provides for a rapid increase in renewables connected to the grid, which will deliver cleaner energy at competitive and more stable costs,” he said. “We continue to work with the regulator to bring renewables to our grid, to meet the needs of the customers as well to ensure that our grid remains safe and reliable.

“CUC has consistently said over the years that when we add renewable energy to the grid it cannot compromise reliability, nor should there be any additional substantial costs to the entire customer base. We embrace effective and fair competition.”

According to the country’s national energy policy, the target is for the Cayman Islands to be generating 70% of its power from renewables, mostly solar, by 2037, but only around 3% of the power consumed here is currently generated from solar.

The two studies that will help determine rates and hopefully push the rollout of more renewables are the Value Of Solar Study (VOSS) by OfReg, and the impact on the fuel efficiency of CUC’s existing generating engines if more renewable energy is connected to the grid before its battery storage project is finished next year.  

In 2020, CUC announced that the CORE programme was fully subscribed. However, OfReg approved an extra 3 megawatts of capacity to the programmes, which has since been fully allocated. Both parties have agreed that there will be a two-week notice period prior to the introduction of the new CORE and DER programmes.