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financial oversight and management board
Protecting Puerto Rico’s Solar Future
Defending Law 10 is crucial for Puerto Rico’s energy independence and resilience.
Aug 12, 2024
Access to affordable, reliable energy is a fundamental right. It’s disheartening to see the Financial Oversight and Management Board oppose Law 10, which safeguards net metering and thus ensures that solar customers receive fair credit for the electricity they generate but do not use.
Law 10—passed earlier this year—extends Puerto Rico’s net metering program through 2031, thereby providing stability for homeowners and businesses who have invested in solar energy. By challenging Law 10, the FOMB risks disrupting this compensation system, which could drastically slow the growth of solar energy in Puerto Rico. This would be a setback not just for solar panel owners, but for everyone on the island who benefits from cleaner, more affordable energy.
Here’s how solar energy works: Homeowners with solar panels often produce more electricity than they consume. This surplus energy flows back into the grid, benefiting their neighbors. Net metering is a billing arrangement that ensures these homeowners receive fair credit for their excess electricity at the current rate. This credit system benefits all electricity users, even those who haven’t installed solar panels.
If the FOMB’s attack on Law 10 is successful, it could jeopardize net metering, leaving us stuck with an expensive, unreliable system that benefits outside interests at the expense of Puerto Rican families.
Increasing the amount of local solar energy in our electrical grid will lower costs for everyone and enhance the island’s energy independence. Currently, 94% of Puerto Rico’s electricity comes from expensive fossil fuels like oil, diesel, coal, and gas. This reliance means that 71% of the Puerto Rico Electric Power Authority (PREPA) budget is spent on importing these fuels.
In contrast, solar energy relies on abundant, free sunlight. It’s irrational to depend on costly foreign fuels when we have ample solar resources and the technology to store solar power. Additionally, our local workforce is ready to install these systems and reinvest the savings into our communities rather than sending money off the island.
Rooftop solar systems make our grid more reliable by reducing blackouts and producing energy exactly where it’s needed. Solar power is generated close to the point of consumption, which is especially important when the island’s power plants are struggling to meet demand. These systems are more reliable because they depend less on fragile transmission infrastructure and imported fuels.
According to a study by Gabel Associates, the social and direct benefits to the grid, and all customers, are four times greater than the value earned by solar energy owners through net metering. Solar power does more than provide affordable energy; it offers peace of mind and essential support to vulnerable communities.
This past May, I attended the opening of a solar resilience center at the Nuestra Señora del Carmen church in Cataño. This church supports many low-income families, providing meals, medicine, and shelter to the homeless. It relies on solar-charged batteries to maintain power during outages, cutting utility costs through net metering credits. These savings are used to further support the community.
Solar United Neighbors, the organization I represent, helped support this church’s solar project. With its solar and battery storage system, the church can maintain power even during grid outages. This is crucial for many, especially those who depend on electricity for medical equipment.
If the FOMB’s challenge to Law 10—which ensures fair net metering compensation—succeeds, then projects like this would face more obstacles. Individuals and organizations would also be hindered from recovering their investments in solar power and storage batteries while facing rising energy costs. It would also devastate the more than 10,000 Puerto Ricans who work in the solar industry. Similar changes in California led to a 22% reduction in the state’s solar workforce.
LUMA Energy, the company managing Puerto Rico’s electricity grid, has warned of upcoming energy bill increases, even as blackouts continue to plague the island. The current system is expensive, unreliable, and flawed. By undermining Law 10, the FOMB is attacking one of the few effective solutions that helps fix our broken system and creates economic opportunities for Puerto Ricans. This potential outcome is deeply troubling.
Hurricane Maria devastated our electrical grid, and we are now rebuilding a system that is resilient, affordable, and locally powered. Rooftop solar energy systems create jobs and ensure energy independence for all Puerto Ricans. If the FOMB’s attack on Law 10 is successful, it could jeopardize net metering, leaving us stuck with an expensive, unreliable system that benefits outside interests at the expense of Puerto Rican families.
Defending Law 10 is crucial not just for current solar users but also for the future of Puerto Rico’s energy independence. We urge Puerto Rico’s legislators to unite and defend the benefits of solar energy for everyone.
US Lawmakers Sound Alarm Over Threat to Rooftop Solar in Puerto Rico
"Net metering has proven essential for families in Puerto Rico and essential for Puerto Rico's progress towards its own renewable goals."
May 17, 2024
More than 20 members of the U.S. Congressional Democratic Caucus on Friday urged a federal colonial oversight board to safeguard affordable access to rooftop solar power in Puerto Rico by protecting net metering, which the lawmakers called essential to the island's clean energy goals and economic growth.
Net metering "makes household renewable energy sources, like rooftop solar, more affordable for families by ensuring they are reimbursed for the extra energy they produce but do not use," the House Natural Resources Committee Democrats explained in a statement.
"A continued commitment to preserving net metering and a renewed focus on solar energy will benefit the island's economy and people."
However, the Financial Oversight and Management Board (FOMB) for Puerto Rico—the controversial unelected federal body tasked with approving and revising Puerto Rico's obligations under a 2016 bankruptcy law—recently directed Democratic Puerto Rican Gov. Pedro Pierluisi and the territorial Legislature to repeal Act 10, which protects net metering through 2031.
"Any attempt to reduce the economic viability of rooftop solar and batteries by paring back net metering should be rejected at this critical stage of Puerto Rico's energy system transformation," 20 congressional Democrats and Sen. Bernie Sanders (I-Vt.) wrote Friday in a bicameral letter to FOMB members. "Net metering has proven essential for families in Puerto Rico and essential for Puerto Rico's progress towards its own renewable goals."
"Net metering has served the people of Puerto Rico well," the lawmakers argued. "It not only compensates homeowners for their contribution to the grid and their reduced dependence on imported fuels, but it also makes renewable energy production economically viable for millions for whom it would otherwise be out of reach."
The letter continues:
Net metering is an engine for economic recovery. Currently, the renewables sector contributes approximately $1.5 billion to Puerto Rico's economy each year and employs more than 10,000 people. In addition to the direct economic benefits, the tens of thousands of solar and storage installations on the island today provide critical backup power for Puerto Rican families and businesses, helping them avoid economic hardship while supporting uninterrupted economic activity during power outages. Many of these systems provide a literal lifeline to people who depend on the uninterrupted operation of medical equipment.
Weakening or ending net metering in Puerto Rico could be devastating. Rooftop solar has added over 800 MW to an electric system whose demand is about 2,500-3,000 MW. As a result, residential solar technology is responsible for most of the progress the archipelago has made toward its ultimate goal of generating 100% renewable energy by 2050. Puerto Rico's net metering and rooftop solar programs have successfully displaced energy that would otherwise be generated by imported fossil fuel, lowering overall costs for all ratepayers.
"Making rooftop solar and battery storage systems less affordable could hurt the lowest-income people most," the lawmakers contended. "Should net metering be eliminated or weakened, the result would be a growing divide between those stuck with exorbitant energy prices from imported fossil fuels and those who can afford their own dependable solar and battery system. Slowing the adoption of rooftop solar and batteries would mean missed opportunities to leverage the private market to protect those most vulnerable to another hurricane's impacts."
After Hurricane Maria devastated Puerto Rico's energy grid in 2017, many Puerto Ricans turned to renewable energy—especially solar—to keep the lights on. Last year, the U.S. Department of Energy announced up to $440 million in residential solar funding for vulnerable households via the Puerto Rico Energy Resilience Fund.
"Undermining net metering would dramatically slow one of the most active solar and battery markets in the country at the time it is needed most."
Puerto Rico "needs more renewable production, not less," the lawmakers added. "Undermining net metering would dramatically slow one of the most active solar and battery markets in the country at the time it is needed most... We urge you to protect net metering in Puerto Rico. We believe that a continued commitment to preserving net metering and a renewed focus on solar energy will benefit the island's economy and people."
The lawmakers' letter follows a call earlier this week from the Solar and Energy Storage Association of Puerto Rico for U.S. President Joe Biden to replace six FOMB members "who are supportive of Puerto Rico, supportive of solar power, and supportive of dissolving the board as soon as possible."
The FOMB has been decried as an anti-democratic colonial body that dictates the island's budget and operates in secrecy. Last year, the U.S. Supreme Court ruled 8-1 to protect the board from public scrutiny.
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