One of the traditional challenges of living on an island has been finding a suitable energy source to support the growth of society. Currently, Barbados and many islands rely almost entirely on imported fossil fuels for power generation. The combination of the ever escalating and volatile price of oil; and the cost of importation, place island nations in the unenviable position of having the highest electricity prices in the world. Within this challenge however are opportunities for energy efficiency and renewable energy generation spurred on by a unique motivation found in few countries.
The effective cost of electricity in Barbados is around $0.65/kWh. This rate varies slightly from residential to commercial power users. If you look at your Barbados Light and Power bill and do the calculation, roughly 60% of your bill is simply a fuel charge. This component, the Fuel Clause Adjustment (FCA) varies month to month but has been increasing at a normalized rate of 3.7% per year over the past 7 years.
In contrast, the price for solar electricity is fixed. Generally speaking this works out to around $0.25/kWh for Barbados. Once the equipment has been purchased, the fuel is free so there are no additional costs. In the case of financing, once the full system cost has been set and financed, the loan repayment amounts are fixed and are predictable unlike the price of oil. If you own a solar photovoltaic system which generates half of your consumed kWh then half would essentially cost $0.65/kWh from the grid, while the other half from solar would cost $0.25/kWh.
The ideal case would be producing more solar electricity than you consume. This might be accomplished via a combination of the following:
- Energy conservation – most affordable, basically free to implement but requires some changes to behavior. Only use electricity that is required. i.e. turn off lights when not in room, turn off TV when it is not being watched.
- Energy efficiency – for the electricity that needs to be used, use it as efficiently as possible e.g. Energy Star appliances, LED bulbs, efficient AC units
- Renewable energy generation – generating electricity from your solar PV system
By simultaneously reducing the consumption and increasing electricity generation, all of your power needs (over the course of a month) can be met with your solar power system. After achieving this, if you consume say, 500kWh per month but generate 600kWh per month, it will not matter to you what the price of grid electricity is as you won’t have a bill to pay anymore! Click here for a residential solar PV case study where you can see all the numbers.