For decades, Bermuda has been a hostage to the vagaries of the global oil market. The biggest impact of the price of oil can be seen in our electricity cost, which in turn impacts the running costs of every home and business. The cost of filling up the tank at the gas station, the profit margins of hauliers and taxi drivers and the air fares our valuable visitors must pay to get to Bermuda are other direct impacts.

A stunning collapse in the price of oil — the US crude price collapsed from more than $100 a barrel to around $37 a barrel in the space of the past 18 months — has effectively been a tax cut for everyone in Bermuda. The fuel adjustment rate on our Belco bills has come down by about a third, for example.

While we are beneficiaries of today’s global energy market, it would be wise to remember that in a more normal environment we play the role of helpless victim, paying up what is required by a market completely out of our control. Our dependency on fossil fuels remains a vulnerability of our economy.

With that in mind and looking to the year ahead, it is encouraging to think that 2016 is set to be the year that Bermuda makes its largest step yet in changing this situation. The Electricity Act 2015, which was tabled in the House of Assembly last month by Grant Gibbons, the Economic Development Minister, offers the potential for a much greater role for renewable sources of energy in our future, as well as a more open electricity market with competition and greater energy efficiency.

As Dr Gibbons told MPs last June when he released the Government’s electricity policy document: “The share of renewable generation is projected to be 35 per cent by 2025 and 38 per cent in 2035.” Such ambitious targets will require a transformation of the Island’s electricity system, with benefits for the Island that will be economic as well as environmental.

A major early move will come this year, when Government invites bids to build a new utility-scale solar farm on an 80-acre site, known as “The Finger” near LF Wade International Airport.

In an article in today’s Business section, Dr Gibbons said: “Although the exact amount of the energy to be supplied will not be known until we go out for competitive tender in 2016, estimates suggest that the area has the potential to supply roughly 20 to 30 megawatts — equivalent to roughly 25 per cent of Bermuda’s peak demand during daylight hours.”

The weakness of most renewables is their intermittent nature — solar panels do not generate electricity after the sun goes down, for example. For that reason, baseload capacity driven by a fuel like natural gas or diesel-burning generators will continue to be needed.

However, if the solar farm can deliver the kind of output suggested by Dr Gibbons, it will be a hugely significant step forward.

The perceived high cost of solar panels has put people off installing them, even those who find the idea attractive and economically sensible on this sun-kissed island with relatively high electricity costs. However, it is encouraging that costs are coming down — quite rapidly in some parts of the world — with the enhancement of the technology.

As Walter Higgins, the chief executive officer of Belco’s parent company Ascendant Group, said last summer, the cost of building a photovoltaic facility such as that planned for “The Finger” has come down by more than 50 per cent in a short time. “A utility-scale solar facility would have cost about $5,000 per kilowatt in the US a few years ago, now it can cost as little as $2,000,” Mr Higgins told The Bottom Line magazine. For Bermuda, this is exciting news, as are the advances in technology to more effectively store electricity from renewable sources, offering the potential to cut down the demands on the oil- or gas-powered generators when the sun is not shining and the wind is not blowing.

Renewables are just one element of the energy policy, which calls for the formulation of an Integrated Resource Plan to decide how our electricity supply will be generated in the years to come.

The choice of baseload fuel, which could change from heavy oil to natural gas or perhaps liquefied petroleum gas, and a conservation campaign are also significant pillars of the policy. The process will be overseen by the Regulatory Authority and there will be opportunities for public input along the way.

During these tough times for the economy, the Electricity Act offers the exciting prospect of starting out on a road to saving vast amounts of money, with the benefits spread across the community. Dr Gibbons has suggested that if the policy’s targets are achieved, the cost of the electricity supply over a 20-year period could be reduced by as much as 6 per cent — or about $7 billion in total.

The prospective combination of economic and environmental advantages should generate the public and political support to drive these plans forward and to encourage broad participation in the debate as alternatives are discussed.