While the Jamaican government’s efforts to increase renewable energy production have yet to produce significant results, some private enterprises are forging ahead on their own. Due to the prohibitively high cost of purchasing electricity from the national grid operator (around 40 cents per kilowatt-hour), many companies have found it is cheaper to generate their own electricity – often with renewable energy sources.
The Jamaica Broilers "Best Dressed Chicken" mascot looks forward to solar power. (Source: Facebook, Best Dressed Chicken)
The Jamaica Broilers Group, the largest poultry producer in the Caribbean, is one of the companies pioneering the transition to renewable energy. As with many other industries and services in Jamaica, electricity is the largest single cost in chicken farm operations. In order to reduce this expense, Jamaica Broilers is currently installing solar photovoltaic (PV) systems – along with efficient LED lighting – at its chicken houses. The first phase of the project will install 15 kW systems at about 40 chicken houses by the end of March, for a total capacity of approximately 600 kW.
The project will cost an estimated US$10 million over two years. Rather than require that chicken farmers leverage their farms as collateral to purchase the solar equipment, Jamaica Broilers will facilitate obtaining supplies and financing to allow farmers to lease the equipment. Each participating farmer applies for the loan, which is financed by the Development Bank of Jamaica (DBJ) through the PanCaribbean Bank at 8.5 percent interest – a relatively low rate for the country. The expected payback period – that is, the amount of time it takes for reduced electricity costs to make up for the solar panel investment costs – is five to six years.
The Jamaica Broilers solar program is a trailblazer in Jamaica’s renewable energy market as one of the first projects that uses renewable energy equipment – rather than farms – as collateral for loans. Jamaica Broilers has the right on behalf of the banks to repossess and sell the solar equipment if farmers fail to meet loan repayment requirements. The project makes use of DBJ’s partial loan guarantee program to reduce the risk faced by private lenders in accepting renewable energy equipment as collateral.
The current phase of the Jamaica Broilers solar project is aimed at supplying energy for daytime use at the chicken farms. Grid access for the PV systems is will be necessary to incentivize the addition of more modules in future phases. In a previous blog I addressed the importance of including solar power in the electricity regulator’s proposed electricity wheeling program. This would allow Jamaica Broilers to send electricity over the grid from its chicken farms to its offices, further reducing the company’s electricity expenses.
Solar investments by private industry are a clear sign that Jamaica is ready for a sustainable energy transition. Renewable energy already makes economic sense on the island due to high electricity costs. It is now up to the government and electricity regulator to create a stable investment environment that will enable the country to meet its goal of 30 percent renewable energy by 2030.
Shakuntala Makhijani is a Climate and Energy Research Associate at the Worldwatch Institute.