Economics, Renewable Energy

Distributed RE Integration Policies in the Caribbean

The high cost of electricity in the small islands of the Caribbean has drive the various governments to take a serious look at incorporating various forms of renewable energy source into their country’s energy mix. As a result electricity markets across the region have seen the introduction of grid interconnection policies, allowing end users with renewable energy generators to connect to the local electricity grids.

This presents a twofold benefit, firstly making the ownership of renewable generation systems more economical and secondly to increase their penetration. Ownership becomes more economical in two ways, oneby reducing the capital cost and two by lowering the payback period. The capital cost can be lowered by neglecting the batteries, which typically accounts for as much as 50% of the cost of ownership. Grid synchronization allows the surplus energy to be sold to the local utility, thereby lowering the payback period of the investment.

The synchronization of small distributed renewable energy sources the local electricity grid is typically achieved through special type tariff arrangements, such as net-metering, net-billing or feed-in. Currently modified versions of the net-metering and net-billing arrangements have been adapted and applied in several Caribbean islands including Antigua, Barbados, Dominica, Grenada, Jamaica, St. Lucia, and St. Vincent.

The Net – metering arrangement allows the end use to sell the surplus electricity generated to the utility at the same rate as the utility charge for energy taken from the grid. This is typically achieved using a single bidirectional meter, as shown below. Thus, for any billing period the end user pays only for the difference at the applicable retail electricity rate (in addition to any other applicable monthly non-energy charges).

Net Metering
Net-Metering Configuration

Net – billing on the other hand, requires that two meter be installed, as shown below.  That is one meter is used to monitor energy taken from the grid and the other to monitor energy supplied to the grid. At the end of the billing cycle, the customer is billed at the utility’s retail rate for the electricity supplied from the grid and the customer is also paid (or their account credited) a specified amount, typically less than the retail rate, for the electricity supplied to the grid.

Net Billing
Net-Billing Configuration

See Adding Solar PV to your Home – grid-tied or stand-alone for more information.

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