Dear Sir,

The Regulatory Authority’s pricing scheme to increase the Fuel Adjustment Rate by 49 per cent and to reduce the Feed-In Tariff by 42 per cent is a disservice to the solar industry and to Bermuda.

This pricing is illogical when you consider the following:

1, Energy produced by the sun and fed back into the Belco grid requires not one drop of Belco fuel, yet the RA pricing scheme allows Belco to sell it back to Bermuda residents using both its tiered block rate plus the FAR

2, Paying solar users 42 per cent less for excess power returned to the grid is both a blow to existing solar users and a significant disincentive for future solar installations, as it lowers the return on investment

How can the RA justify charging FAR on solar-generated energy returned to the grid? It’s not logical and defeats the purpose of promoting alternative energy to lower electricity costs. The way it works now is that Belco pays a Feed-In Tariff to solar users for excess energy generated by the solar user’s system. That rate used to be $0.2265/kWh. Under the new RA pricing scheme, the FIT is reduced to $0.131/kWh.

Comparing the RA’s and Belco’s old (pre-October) pricing scheme with the new (post-September) pricing scheme for excess solar going back to the grid, Belco’s net increases by 234.7 per cent (First Block 0-250kWh), 96.7 per cent (Second Block 251-700 kWh) and 55 per cent (Third Block >700kWh.) Calculations are based on Belco Net = Block Rate + FAR – FIT.

These numbers are quite dramatic and clearly show that the RA should rethink the pricing of solar power returned to the grid. Instead of using clean solar energy to reduce the bills of Bermuda residents, it chose to greatly increase Belco’s net. Using FAR in the calculation for pricing solar power returned to the grid is totally illogical, as the only fuel used was provided by the sun.

To be fair, one should point out that the amount of solar power returned to the grid at present is a small number when compared with the total power required by Bermuda. Even if the RA were to fix the pricing for this relatively small part of Bermuda’s total energy, it would have little effect on bringing down overall electricity costs. However, you need to start somewhere, and, as it is widely believed, the only way out of Bermuda’s energy dilemma is to introduce far more alternative energy into Belco’s energy mix. As the amount of clean alternative energy introduced to the grid increases, the cost of energy, if priced correctly by the RA, would decrease significantly. The effort to produce clean energy in quantity needs to start now. Not with some target for 2035 or 2050, but now!

Given the above, just think if the Government were to invest just $5 million to jump-start clean energy. At $25,000 per installation, it could put solar panels on 200 Bermuda homes. Ten million dollars would get us 400 homes; $70 million — the incentive payment for the Fairmont Southampton — would get us 2,800 homes. Can you imagine the impact this would have on these households and the number of new jobs created, not to mention the long-term impact on the economy?

Lastly, I am puzzled by the lack of outcry from the Bermuda solar Industry, regarding the RA’s double whammy pricing scheme of increasing the FAR and reducing the FIT. I believe it would be a great service to Bermuda if the solar industry, which employs many Bermudians, would team up with the environmentalists to form something like the “Bermuda Clean Energy Association” that would act as a strong voice/advocate for alternative energy, and a check on the RA and Belco. The Government should also be driving this effort as our entire economy is dependent on reducing energy costs.

PATRICK CERRA

Southampton