I do my crying in the rain: Issues in distributed solar photovoltaic regulation within a Caribbean small island market

• In Event: Law and Economics

Abstract

Affordable energy is an essential ingredient in the growth and future development of small island economies in the Caribbean. To achieve lower prices, international agencies have advised Caribbean economies to follow the liberalization path of North America and open up their electricity markets and incumbent vertically integrated monopolies to competition. The small size of most Caribbean electricity markets however limits the feasible introduction of unbundled competitive companies. Distributed solar photovoltaic technology emerged as an alternative mechanism to introduce competition within small island markets. The temptation however is for Caribbean nations to wholesale adopt the models of distributed solar photovoltaic integration employed by North America without acknowledging that small island markets have some unique characteristics that give rise to unique issues in their operation. The adoption of North American models of pricing to encourage the growth of distributed solar photovoltaic without due consideration to these unique characteristics has resulted in issues that threaten to undermine operating efficiency of Caribbean small island electricity markets. The aim of this paper is to identify a framework for regulating the adoption of distributed solar photovoltaic within the context of a small isolated island electricity market. A case study of the market landscape, regulatory regime and electricity load profile on island of Barbados is employed to glean lessons on the drivers and regulatory impacts of distributed solar photovoltaic adoption. The research will offer recommendations to regulators and policymakers for the design of an appropriate framework to facilitate the efficient penetration of distributed solar photovoltaic generation within small isolated electricity markets.

Author

• Adrian Carter, University of the West Indies