By NEIL HARTNELL
Tribune Business Editor
The Bahamas Renewable Energy Association’s president yesterday said a recent Inter-American Bank (IDB) report “says it all” on renewable energy, adding: “The opportunity’s there but nothing’s being done.”
Guilden Gilbert told Tribune Business he and other sector players were not shocked at the criticisms contained in the IDB’s 2013-2017 Bahamas country strategy, which essentially said this nation had made little to no progress on renewable energy.
“I’m not surprised,” he said of the findings. “It comes to the point where they’re saying the same thing over and over again. The opportunity is there but nothing is being done.
“As a study and report, it says it all.”
The IDB said the Bahamas has yet to implement efficiency and conservation measures that could slash hotel and residential energy demand by 27 per cent, despite supplying recommendations on how to do this two-three years ago.
“Bank-financed studies reveal that low-cost energy efficiency and conservation measures that could save the equivalent of 27 per cent of present demand from the tourism and residential sectors are yet to be implemented,” the IDB report said.
“Renewable energy technologies such as solar water heaters and photovoltaic (PV) systems also remain untapped, but present attractive opportunities for diversification of the energy matrix given their favourable generation costs.
“However, implementation of energy efficiency and renewable energy will not only depend on the removal of legal barriers, but also on the promotion of programmes to enhance awareness, to create incentives for private sector participation and to overcome the financial and technical constraints faced by the energy efficiency and renewable energy markets.”
And, while the Bahamas’ possesses some 240-plus financial institutions, an IDB study had found that just four - less than 2 per cent - offered products that could help to finance renewable energy or energy efficiency projects.
This was creating a further barrier to reducing the Bahamas’ dependence on fossil fuel energy, and the IDB said one of its goals over the next four years was to help structure special purpose vehicles (SPVs) that could be used to finance private sector and residential renewable energy projects.
On the somewhat limited prospects Bahamian businesses and households have for financing renewable energy projects, the country strategy added: “According to the IDB’s study, despite the large number of financial institutions (banks & trust companies) licensed to operate in the Bahamas, only four financial institutions offer products that could potentially be used to finance energy efficiency or renewable energy projects.
“Among the main reasons for the low supply of credit [are] the small size of individual investments; the low prospects on returns in the energy efficiency and renewable energy market; and high perception of risks by local financial institutions.”
Mr Gilbert said his renewable energy firm, Alternative Power Solutions (APS), had an arrangement for the financing of residential renewable energy projects with Commonwealth Bank, but “we haven’t tested it yet to see how big a project they would do”.
For larger, commercial size projects, such as the 25 kilowatt photovoltaic (PV), grid-tied system planned for the new Bahamas Agricultural and Industrial Corporation’s (BAIC) new headquarters, Mr Gilbert said APS had a financing partner that had funded $200 million worth of global projects.
“The question really is: How many clients, or potential clients, are going to look to finance through the bank rather than out of their own pocket?” Mr Gilbert asked.
“A lot of it comes down to the availability of funds and at what rate. The rate has to be attractive enough, as people are looking to it to counter the cost of electricity, so they will want payback to be at least lower than what they pay to BEC in the summer.”
Mr Gilbert added that the legal and regulatory environment surrounding renewable energy also needed to be cleared up, saying: “I think there’s still a lot of confusion over what can and can’t be done. We get conflicts.”
But, other than that, the Bahamas Renewable Energy Association chief expressed hope that the Government would take on board the IDB’s findings, adding: “What they’ve said needs to be digested.”