Turned off

Falling oil prices hurting renewable energy businesses

Barbadians appear to be abandoning solar power systems as falling oil prices have driven down the cost of electricity.

Industry players said the installation of new photovoltaic (PV) systems had ground to a virtual halt, blaming the price of oil for reluctance among individuals to switch. They also complained that the Electric Light and Power Act (ELPA) had made solar power systems less attractive to local businesses.

Barbados TODAY understands that at least three installers have gone out of business and stakeholders were hoping things would improve before others are forced to shut down.

While Executive Director of the Renewable Energy Association (BREA) Clyde Griffith would not confirm the closures, he said members were reporting that “things are tough”.

Executive director of the BREA Clyde Griffith.
Executive director of the BREA Clyde Griffith.

Addressing a breakfast seminar yesterday to examine The Role of the Financial & Insurance Sector in Advancing the Green Energy Initiative, Griffith said while the country saved about US$200 million a year on its fuel import bill due to lower oil prices, renewable energy businesses were taking a hit.

“What is vexing is that because of the drop of the price of oil and other issues we have the situation where the renewable energy [industry] has virtually been coming to a standstill. A lot of our members have been reporting that they are not getting any business because of that,” Griffith said.

Williams Solar is one of the leading photovoltaic installation companies here. General Manager David Green agreed that people were hesitant to install renewable energy systems because of much lower electricity bills.

However, he told Barbados TODAY “the real stumbling block” facing some companies that considered installing systems over five kilowatts was the tedious and costly process mandated by the ELPA, which was passed in December 2013 and amended in April 2015.

“So now you are required to go through a registration process as well as pay for a licence and then annual fees following that; and then renewal fees ten years later,” said Green.

“So they have added a whole bunch of additional requirements to having a renewable energy system installed; and that has turned some people off, especially for the larger systems where the fees escalate to quite large sums of money and therefore take away from that investment. So we are really seeing that as the stumbling block.”

He could not say how significant a hit his business had taken, but said the company’s “very large commercial base” had been reduced.

Green’s experience with homeowners appeared more encouraging, with some individuals anticipating oil prices would rise again. However, overall the photovoltaic industry is reporting a blackout.

Owner of EnSmart Inc Jerry Franklyn told Barbados TODAY “nobody is installing anything right now”, adding that new installations were “grinding to a halt”.

Franklyn explained that because his company specialized in the installation of battery-based systems, as opposed to those connected to the national grid, business was generally slow. He said things got worse towards the end of last year when he received a few inquiries but no business.

“There are a couple people who want to install in spite of the oil [prices] but yet they are still not doing anything. They haven’t moved forward.

“Coming on to the end of last year, around November/December it started to slow down dramatically into this year,” Franklyn said.

“The bulk of it has to do with the oil prices. That is certainly the feedback I get from potential persons. They tell me that right now their utility bill is low.”

Still, he was hanging on to hope that the situation would improve and people would invest in PV systems again.

In the meantime, Franklyn, the vice president of BREA, said industry players would have to be creative if they were to hang on until oil prices increased.

“Diversify your business a bit if you can but right now there isn’t really any answers. That is it, you just need to try to survive this and see how it goes. And I don’t know how much longer it is going to go and I don’t know how much longer I can hold,” he said.

The thermal water heating industry has also taken a hit, even before the recent dramatic fall in oil prices, according to Sales Director of Sunpower Hot Water Systems Henry Jordan. He told Barbados TODAY that sector of the industry had been at a standstill for the past five years because of a lack of policy initiatives.

“The lack of policy setting and policy initiative by Government has retarded a great growth of the sector. If the Government worked and had meetings with the sector and produced policies it would have actually allowed . . . the entire sector to mushroom and grow,” said Jordan, adding that he did not foresee things getting any worse for Sunpower.

However, Acting Deputy Permanent Secretary in the Ministry of Energy Francine Blackman, in outlining Government’s support for the renewable energy sector, said the administration would continue to press ahead to achieve its green energy goals.

She said since the proclamation of the ELPA in May last year about 30 licences had been approved for intermittent energy and she gave the assurance that a roadmap for the sector would be completed by May of this year.


7 Responses to Turned off

  1. J. Payne February 19, 2016 at 2:56 am

    This is what the oil countries wanted. Then when solar companies go out of business they’ll start to raise cost again.

  2. jrsmith February 19, 2016 at 7:34 am

    I take my time and comments, from what goes on in the UK, when it comes to renewable energy.. the government in the UK , gradually wound down most of the hyped up programmes which was on offer , to the public , as to the use of solar energy, many companies involve in the wind farm energy, is warning its to expensive, and non economical..

    Once again , Barbados/bajans are caught out by ,the politicians and CV jocks, who used the media, to try and further they careers, by , just talking pure crap to the media, I said before small islands like Barbados , should be careful, because they are being used as guinea pigs for most corporates, spear heading by certain so call educators.. look at the Cahill fiasco, watch this space for that, a lot more of that is coming…

    Barbados have a head start , to most of the world when it comes to solar power, decades of that technology, we should be manufacturing under licence the cells plus panels, and selling the technology, but where are we at, all because we are thinking for ourselves, we need the vision of people who are logic thinkers. all we tending decade after decade is to wait and see..

    Can we see , large countries like ,USA, UK, Canada, and Europe, and China, is making sure, the flag bearers of, Renewable Energy and Climate Change, are the poor countries ,who have no real say , or challenging power, so they just in the back ground offer few dollars to the poor countries, and politicians love that because its an excuse to save they failing assess…

  3. Sam Clarke February 19, 2016 at 12:39 pm


  4. KENNETH McGILL February 19, 2016 at 12:46 pm

    Good points from both early responders. Push hard for solar materials while manufacturing costs are low. Take the lead in solar technology and market it to other areas.

  5. Trina February 19, 2016 at 1:31 pm

    This is how Barbadians think we only plan for the now and immediate future we cannot seem to plan for the long haul. We are all about instant gratification and only think about consequence as they happen. To me as a country that has sunshine all most year round it makes since to wean ourselves off of a commodity that the price can go up at any moment with the amount of unrest in the Middle East which is one of the biggest producers of crude oil that dictates the prices of it. Sometime in the near future ”terrorist” will start destroying oil lines and the price of oil will sky rocket cause USA losing profits at the low cost oil is right now. Then where will Barbados be at the mercy of ridiculously high prices of everything again. We as a people need to be so shortsighted and have more vision!

  6. Alex Alleyne February 19, 2016 at 2:51 pm

    Pure and simple, If the Government wanted and care about its people it will make it possible for the home owner to install energy saving devices by giving TAX brakes . A barrel of crude oil will not stay at one low price for too long . The current price is just to put the squeeze on PUTON while the USA increase its oil supply so that when the price jump they will have and adequate amount in stock.
    Most of the leaders in the Caribbean are not LONG TERM planners /thinkers, that’s why we will continue to run “cup in hand”- “tail between legs” to Europe and North America.
    In countries where you have this big hot water heater stored in your home/garage , the Government is giving the home owner TAX rebate for installing the NEW electric unit just like we have in the Barbados for heating hot water.

  7. jrsmith February 19, 2016 at 4:54 pm

    Oil is nothing to do with , the so call renewable energy, oil is a commodity, solar energy is a luxury. Barbados power, infrastructure is old and need bringing up to par, our island is too small to sustain, a high level of solar power business, anyway, our priminister and politicians always say lots of different things, when they are talking to foreigners , but cannot follow up when they are back in Barbados..

    Where is the money going to come from , for the installation and financial breaks, all we need to do ,work with what we have , improve the technology.. we had a chance ,a couple of Canadians , were considering , a manufacturing business on Barbados, what has happen to that. Who ran them off..


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