DOE Offers Loan Guarantee For 200 MW Solar and 285 MW Storage in Puerto Rico
The Department of Energy announced an incentive loan guarantee program designed to expand solar-plus-storage power in Puerto Rico
following recent hurricane damage to its grid. Their Loan Programs Office granted Clean Flexible Energy LLC conditional commitment for projects located along coastal communities Salinas and Guayama on the island; each project would include two solar photovoltaic farms equipped with battery storage as well as two standalone battery energy storage systems which, combined, could produce up to 200MW solar capacity and 285MW of standalone battery energy storage, enough energy storage to power 43,000 homes annually.
These projects should meet the energy needs of Puerto Ricans living in vulnerable mountain towns and rural areas. By helping reduce dependence on fossil fuels and meeting renewable energy targets such as reaching 100% clean power by 2050, they will help the island meet its ambitious renewable energy goals.
Puerto Rico receives four times as much sunlight than the U.S. mainland and therefore primarily relies on imported oil and coal to meet its electricity needs. Last year’s Hurricane Maria wrecked havoc on Puerto Rico’s energy infrastructure – leaving at least three thousand dead as well as leading to extensive power outages that lasted months across rural communities.
Since that time, the power utility on the island has intensified efforts to switch out fossil fuel plants for solar and storage solutions, replacing fossil fuel plants with solar. Furthermore, in March the government issued a request for proposals seeking new cost-effective approaches to provide power from renewable sources.
As part of its announcement, the LPO also unveiled a $325 million grant program designed to assist communities in installing solar and battery systems in places such as community health centers or multifamily housing properties. Funding will come through President Joe Biden’s $1 billion Puerto Rico Energy Resilience Fund that was signed into law late 2022.
The LPO expects this project will create jobs during both construction and operations, supporting its objectives of strengthening rural economies, encouraging renewable energy production and providing economic and environmental justice opportunities in disadvantaged communities. To that end, the agency announced it will utilize its Justice40 screening tool that ensures 40% of benefits derived from projects receiving LPO financing are shared among underserved communities. Projects must include a plan for community engagement that includes identifying and engaging local workforce development, entrepreneurship and other programs offered to residents near where the project is located. Plan should also take into account social equity effects and environmental justice considerations. LPO officials will review this plan prior to entering into financing documents with borrower. LPO requires company to establish independent environmental review process to ascertain whether projects meet loan criteria.