HOW THE PROPOSED ELECTRICITY ACT IMPACTS YOUR BOTTOM LINE

For us Saint Lucians, the rising cost of energy is a constant worry. Whether you’re running a household or managing a business, energy bills can feel like a burden, limiting your ability to save or invest in what matters most. But it doesn’t have to be this way. Renewable energy—in particular solar PV—offers a real chance to take control of your energy costs, stabilize your expenses, and secure a better quality of life.

With the growing demand for electricity driven by cooling technologies like air conditioning and the shift to electric vehicles, renewable energy is no longer just "nice-to-have." It’s becoming a necessity for managing costs effectively. The proposed Electricity Act could shape the path forward, but how it’s implemented will determine whether it truly benefits you or holds you back.

Solar PV is a proven technology that has been successfully deployed worldwide, including neighbouring countries like Barbados. Locally, it has been accessible for over 15 years and over the past decade, the cost of electricity from Solar PV has dropped by more than 50%, now averaging under $0.35 per kWh, with further declines expected. In fact, solar energy is now more cost-effective than electricity generated from fossil fuels. This isn’t just good for the environment—it’s a game-changer for your wallet.

Renewables put the economics in your favour. Unlike fossil fuels, which are subject to price spikes and market shock that directly impact your pocket, Solar PV systems have minimal operating costs once installed. With free and abundant sunlight, solar energy offers a smart way to cut energy costs, reduce reliance on fuel and increase your property value while lowering your carbon footprint and improving air quality.

The Department of Energy held public consultations in September to present the draft Electricity Act for public feedback. The Alliance for Green Innovation actively participated in these consultations and submitted detailed, written feedback to the Ministry. Our feedback highlights the concerns of private sector organizations eager to engage in this transformative energy space, emphasizing the need for the legislation to effectively support Saint Lucia’s energy transition goals.

To unlock these financial benefits fully, it’s essential to have policies that support fair access to renewables, making it easy and profitable for individuals and businesses alike to invest in their own energy solutions. At the end of the day, renewable energy adoption is about putting money back in your pocket and creating an energy future that empowers you, strengthens the economy, and protects our planet.

Shifting away from Economic Inequity

Today, the distributed generation of renewable energy, coupled with battery storage technologies, are price competitive with diesel generation, providing us with an alternative to replace the over two hundred million dollars spent on imported diesel. The democratization of energy generation provides an opportunity for innovation. It favours a well-functioning energy ecosystem, in which the utility plays an important role in energy transmission and distribution. It provides opportunities to explore new business models, especially in energy distribution, that would enhance the utility’s profitability. The current monopoly, and proposed legislation, limits the nation’s ability to adapt and prepare for the future.

The Utility’s Role in a Renewable-Powered Future

Utilities play a critical role in the renewable energy landscape. They maintain the infrastructure that keeps electricity flowing, balance supply and demand across the grid, and ensure reliable service. As solar and other renewable sources increase, the utility’s role doesn’t diminish; instead, it shifts. Utilities must now adapt to manage a grid that accommodates both centralized and distributed power sources.

A balanced policy would allow the utility to continue providing reliable service while enabling citizens and businesses to generate and use their own solar power. The utility can also benefit from solar adoption by creating a more stable, sustainable grid and reducing its dependency on expensive fuel imports. Additionally, as energy demand grows with the electrification of transport and other sectors, the utility will find new opportunities for growth and stability in managing a diversified grid.

However, for this transition to succeed, legislation must ensure that utility facilitates rather than restrict solar adoption. By embracing this model, the utility can continue to play a pivotal role in energy delivery while fostering a healthier, competitive market that empowers consumers.

Key Impacts of the Proposed Regulations

While the new regulations support renewable energy on paper, certain restrictions could limit solar adoption, stifle competition, and potentially infringe on citizens’ rights. Here’s what these policies mean for you:

1.  Limits on Self-Generation and Property Rights
   The regulations impose arbitrary size limits and penalties on solar installations, restricting how much energy individuals and businesses can generate and use. This infringes on property rights, as citizens are prevented from fully utilizing their investments and resources on their private property. The Constitution protects against unreasonable restrictions on property, and these arbitrary limits lack a sufficient and compelling public interest justification.

The proposed legislation introduces a buy-all, sell-all structure, where customers sell electricity to the utility at one rate but must purchase it back at a higher rate. For commercial systems larger than 15kW, customers are restricted to installing PV systems that generate only up to 50% of their peak demand, capped at 100kW. For example, a business with a peak demand of 200kW can only install a 100kW system.

If customers are credited the cost of the diesel offset by solar—a commonly used method —estimated at approximately $0.60 per kWh (as per the utility), they would only save around 25% of their energy costs. This structure does little to enhance the competitiveness of businesses or significantly reduce the energy cost burden on homes. It fails to incentivize widespread adoption of solar and undermines the potential economic and environmental benefits of renewable energy. Additionally, it does little to help us meet our international sustainability commitments.

Furthermore, the proposed legislation lacks provisions for individuals who have already installed Solar PV systems that do not align with the new parameters. This oversight leaves existing solar adopters in a state of uncertainty. Meeting these new parameters can lead to a loss of saving from installed systems.

2. Concentration of Power with the Utility

The Electricity Act and National Energy Policy designate the utility as the primary—or in some cases, sole—major contributor, aside from the Government and the National Utilities Regulatory Commission, in critical energy sector planning and policy development. Other stakeholders are limited to providing input only after these rules have been established. This concentrated influence creates a conflict of interest, as the utility, which profits from energy sales, holds significant control over the rules governing renewable energy producers. Such a setup risks stifling competition, keeping costs high, and limiting the economies of scale needed to make renewable energy investments attractive for citizens and businesses.

3. Inconsistent and Unclear Tariff and Customer Classes
   A big obstacle to adopting renewable energy is the lack of clear, customer classifications and the tariffs that accompany them. The current legislation does not provide straightforward guidance on the various customer classes and specific requirements aren’t always well-defined. This makes it difficult for consumers to understand where they fit and what benefits they are eligible for. This inconsistency complicates the decision-making process, as customers are left guessing about the costs and savings they will experience.

For renewable energy adoption to thrive, tariffs need to be transparent and predictable, with rates that are locked in for the lifetime of the system. This stability is essential for customers and finance institutions to have confidence in their investment, knowing that the benefits won’t fluctuate unexpectedly over time. Clear, simple tariffs and customer classifications that ensure consistent returns will make renewable energy a financially attractive and accessible option for everyone.

4. Missed Opportunities for Local Ownership and Economic Growth
   By keeping control centralized, the regulations discourage individuals and small businesses from investing in solar, which would create jobs, increase local economic activity, and promote innovation. In other regions, solar growth has led to employment in installation, maintenance, and energy management. We could see the same benefits, but only if citizens and local companies are encouraged to enter the market.

Opportunities for Improvement in Energy Policy

To fully harness the benefits of renewables, policies must focus on maximizing access and affordability for all. We have proposed the following improvements:

• Remove Unnecessary Limits on Solar Installation Sizes
  Arbitrary restrictions on solar installation sizes should be lifted to uphold citizens' rights to self-generate electricity. This empowers households and businesses to fully utilize their solar potential, saving money and contributing to a cleaner energy future. We have requested a legal review to ensure these rights are protected.

Currently, two main factors limit the widespread adoption of solar energy:

• Neighbourhood Transformers: The capacity of local transformers to handle the additional solar energy fed back into the grid.

• Grid Stability: The ability of the grid to manage excess electricity exported without causing instability. At present, this is 30% of total electricity generation.

With proper planning and investment, these challenges can be addressed. Upgrades such as utility-scale and residential energy storage, grid reinforcement, and smart grid software can ensure the system can handle increasing levels of renewable energy. These investments must align with the growth in solar adoption to maintain grid stability as we move beyond the 30% renewable energy threshold.

• Ensure Open Competition and Fair Access
  Foster a competitive market that prioritizes the rights of Saint Lucia’s 183,000 citizens to self-generate electricity. Leveraging economies of scale will reduce the cost per watt of solar installations, making the return on investment more attractive. This approach will drive greater adoption of renewable energy, promote local ownership of the sector, and enable us to meet our international commitments through local investment, ensuring that the benefits remain within our communities.

• Implement Regular, Transparent Legislation and Tariff Reviews
  Establish a five-year review cycle for the Electricity legislation and a two-year review cycle for electricity tariff structures. These reviews will ensure that the legislation aligns with the country's evolving needs, incorporates advancements in technology, and adjusts to market conditions, providing long-term confidence for renewable energy investors.

• Encourage Local Ownership and Job Creation
  Local ownership of the energy sector doesn’t require owning shares in the utility. By investing in your own renewable energy system at home or for your business, you gain direct ownership and enjoy the best returns on your investment by significantly reducing your energy costs.

An open market that encourages local renewable projects fosters economic growth and job creation in areas such as solar installation, maintenance, and support services. A renewable sector owned and driven by locals ensures that profits stay within the community, strengthening the local economy and building a more resilient future.

A Vision for the Future: Shared Benefits for All

We believe that the issues stated above are critical to resolve before the passage of any legislation. Renewable energy is transforming our world, and Saint Lucia stands at a crossroads. With the right policies, we can lower costs, increase energy independence, and drive economic growth. Imagine a future where clean, affordable energy powers our communities, reducing bills for households and increasing profitability for businesses. This vision is achievable, but only if legislation empowers citizens, businesses, and utilities to work together.

Make Your Voice Heard

The decisions made today will shape Saint Lucia’s energy future. Stay informed, advocate for fair policies, and share your thoughts. Renewable energy is not just about the environment—it’s about protecting your bottom line and creating a sustainable, equitable future for all.

Follow the Alliance of Green Innovation and Technology on Instagram and Facebook, or visit our website to share your feedback. Together, we can amplify your voice and build a future that works for everyone.