Puerto Rico could soon build its biggest solar and grid battery plants

Utility-scale solar in Puerto Rico has just received an $861 million boost from the federal government.

On Thursday, the Department of Energy’s Loan Programs Office announced a conditional commitment to finance new solar and battery storage facilities on the southern coast of the island. The two solar farms under the project are expected to provide 200 megawatts of solar capacity total, enough to power 43,000 homes, while a pair of stand-alone battery systems will provide up to 285 megawatts of energy storage capacity.

According to clean energy experts, the new facilities, dubbed Project Marahu, would be the largest solar and battery storage installations in Puerto Rico, which has primarily seen growth in small-scale clean energy systems like rooftop solar.

The project also marks the latest step toward the territory’s goal of switching to 100 percent renewables. Although Puerto Rico receives roughly four times the amount of sunlight needed to meet its residential electricity needs, it currently relies on fossil fuels for more than 90 percent of its electricity. In 2019, Puerto Rico legislators committed to phasing out coal-fired power by 2028 and using only renewable energy by 2050.

The announcement is an encouraging sign as the island pursues ambitious clean energy goals, said Sylvia Leyva Martinez, a utility-scale solar analyst at the energy consulting firm Wood Mackenzie. ​“Hopefully with the support of the DOE, we’re going to see not only this project, but more utility-scale development in the region in the future.”

The project will be led by Flexible Energy LLC, which the agency described as an ​“indirect subsidiary” of the U.S.-based energy giants AES Corp. and TotalEnergies Holdings USA. Proposed facilities will be sited in the municipalities of Guayama and Salinas.

Also on Thursday, the DOE announced $325 million in newly available grants under the $1 billion Puerto Rico Energy Resilience Fund, which President Joe Biden authorized in December 2022 to invest in clean energy and resilient grid infrastructure. The agency will soon issue those funds to install solar and battery storage in community centers, health-care facilities, and multifamily housing.

Federal officials say that, if finalized, the new loan guarantee would help increase grid resilience in Puerto Rico, which has faced severe outages following a series of storms that killed thousands of people and destroyed vital grid infrastructure.

After Hurricanes Irma and Maria swept through the island in 2017, 1.5 million customers lost power — many for months and some for nearly a year. In 2022, Hurricane Fiona made landfall and once again led to a weekslong power outage. And last month, a widespread power outage as a result of routine maintenance work left more than 350,000 customers in the dark, leading Governor Pedro Pierluisi to criticize Puerto Rico power companies’ ​“lack of sense of urgency” in fixing grid reliability issues.

In response to chronic power outages and local power companies’ continued reliance on fossil fuels, Puerto Rico residents have led an unprecedented push for rooftop solar, which provides reliable, off-grid power and can lower energy costs.

Puerto Rico customers pay about 41 percent more than the U.S. average for electricity, in part due to the dominance of coal and gas on the island. Since 2017, renewables have ballooned from 2 percent of Puerto Rico’s power generation to 9 percent, all thanks to rooftop solar installations, according to the Institute for Energy Economics and Financial Analysis. Homes and businesses enrolled in net metering for rooftop solar have also catapulted from 15,000 in 2019 to 117,000 as of March, providing over 810 megawatts in capacity. (The island’s electricity demand peaks at around 3,000 MW.)

Puerto Rico’s geography has also helped push the island toward smaller-scale clean energy projects. It has limited land available for large solar and wind farms, and transmission lines connecting far-flung power plants to urban populations remain vulnerable to extreme weather and neglect. Leyva Martinez added that developers are also finding it increasingly difficult to get insured for projects in areas prone to natural disasters. An analysis by Wood Mackenzie estimated that over the next 10 years, more than 90 percent of solar capacity in Puerto Rico will come from distributed resources like rooftop solar.

Still, Leyva Martinez says that utility-scale renewable power remains necessary for the island to hit 100 percent renewables. ​“There has to be development on the distributed generation side, but also on the utility side to replace all the fossil fuel generation that makes up most of the generation mix currently in Puerto Rico,” she said.

As it stands, the biggest solar installation in the territory is a 45 MW facility, per the Energy Information Administration. A solar-plus-storage project with 90 MW of solar capacity and 51 MW of battery storage is set to go live this year. Project Marahu, with more than double the solar capacity and far more battery storage, would eclipse both.