Imagine if your bank not only had a hand in managing your money, but also the lights in your home or business.
As Puerto Rico grapples with its electrical grid problems that left the island in darkness for months after Hurricane Maria in the fall of 2017, credit unions are banding together to alleviate anxiety around the island’s unstable electrical network.
“For them, it’s not a question anymore,” said Pablo DeFilippi, senior vice president of membership and network engagement at Inclusiv. “It’s something that they have to do to survive in emergencies to come because they have to have energy independence.”
The Puerto Rico Electric Power Authority has long had a monopoly on generating and supplying electricity to the territory but the government-owned corporation has fallen on hard times. Financially, it has defaulted on its debts and its system badly needs to be upgraded.
This monopoly made widespread adoption of clean energy technology insurmountable for Puerto Ricans, Jaime Cuevas, cooperative marketing manager of the Cooperativa de Seguros Múltiples de Puerto Rico, said in an e-mail.
That changed in December when Puerto Rico Gov. Ricardo Rosselló signed the Electric Cooperatives Act, which authorized Puerto Rican energy co-ops. Communities can now form groups, or electric co-ops, to generate their own electricity for their homes and businesses through solar panels, though nothing has been implemented yet. This should ultimately reduce reliance on the current electric grid.
Puerto Rican credit unions, called cooperativas, spearheaded the push for the law as a way to help members and in hopes of eventually making more loans for solar energy systems once the electric co-ops take off. Many of them are now looking to specialize in disaster financing, including providing loans for generator purchases, deployment of solar power technology and financing repairs of homes and businesses that were destroyed during the hurricane.
“[The cooperativas] develop[ed] the basic ingredients that [were] finalized in the law, and the movement to create electric co-ops in PR,” Cuevas said.
Some areas of Puerto Rico are reportedly still running on generators, according to Cuevas. Given the instability of the power grid, many credit unions have installed their own solar panels on branches in the wake of Hurricane Maria. These institutions are estimated to have spent $15 million, according to Cuevas and DeFilippi.
There’s hope that moving to solar will make electricity cheaper for the territory’s residents. The average kilowatt-hour costs almost $0.20, making Puerto Rico one of the more expensive states or territories for electricity in the U.S., according to data from the U.S. Energy Information Administration and Electric Power Monthly. Hawaii is No. 1 at more than $0.29 per kilowatt-hour.
New Energy Consultants & Contractors, a solar installation company based in San Juan, has seen a 30 percent increase in sales. The largest share of clientele encompasses non-governmental organizations such as the Red Cross, the Clinton Foundation and the Solar Foundation.
Right now these upgrades are being done outside of the electric co-ops and instead involve residents and entities with a desire to tap into clean energy. But New Energy is interested in eventually partnering with electric co-ops on projects.
“People always knew that electricity wasn’t something to always count on,” DeFilippi said. “If you’re able to produce your own energy, the cost of that energy will go down, which is a big motivator for communities.”
Financing is believed to be the largest obstacle regarding a swift solar adoption. Some lenders providing financing for these projects require a FICO of at least 650, meaning some Puerto Ricans won’t qualify, said Alejandro Uriarte, CEO of New Energy Consultants.
“Hurricane Maria made most people in PR believe that they need to become energy independent, but many people [and] companies lack the funds to acquire a solar/storage system,” Uriarte said. “We need incentives to lower prices and make these systems more available and we need financing options for people of all credit types.”
The solar installation company is working with several communities on the island to implement microgrids, or small networks for users that rely on a local power supply attached to a national grid but still have the capacity to perform independently. Many of the credit unions are brainstorming ways to finance the microgrids, DeFilippi noted. New Energy Consultants is also using several credit unions to finance residential solar projects.
“The opportunity here is to demonstrate that the private sector can solve this problem,” DeFilippi said. “There’s this trial period where they need to make it happen at least at the prototype level, so we can expect to see an energy co-op to be running by 2020.”
