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Banks Are Challenged Over Renewable Energy Lending

A Chamber executive has challenged Bahamian commercial banks to explain their reluctance to finance renewable installations, as homes and businesses continue to “bleed energy”.


Debby Deal, head of the Chamber’s energy and environment division, questioned why lenders seemed so reticent to support the increased penetration of renewable energy and other productive activities when they were all-too-willing to fund auto purchases and other consumer goods.


Speaking at an event to promote the upcoming fourth Bahamas Energy Security Forum, Ms Deal said renewable energy devices and second-hand cars were not dissimilar in price, and questioned whether so-called ‘lien laws’ would give the banks confidence to lend.


Without access to financing, she expressed concern that renewable energy would become the preserve of businesses and wealthier Bahamians while excluding the vast majority of households. “The banks will lend money for people to buy a car, but will not lend money for alternative energy,” Ms Deal said. “We need to find out why. The costs are the same. Why are the banks willing to do that?”


Recalling that the Bahamian Contractors Association (BCA) had been speaking about the need for the Bahamas to introduce so-called ‘lien laws’, which would provide the construction industry with legal remedies against delinquent clients, Ms Deal said this might need to be “brought back into play” to encourage banks and installers when it came to renewable energy.


Taking a solar water heater as an example, she said that while the typical $4,000-$5,000 cost “doesn’t sound like much, to a lot of people that’s a lot of money”.     Ms Deal said it “doesn’t make sense” for alternative energy to only be affordable for businesses and upper income Bahamians, and added: “We need to find ways to embrace alternative energy and make it available for everybody, not the rich.”


The conference, set for March 23 at The Island House, will this year focus on ways that businesses and households can cut their energy consumption by 30 per cent through tackling what Ms Deal described as the “energy bleed”.


“In the past we’ve talked about regulations, policies, the energy company [Bahamas Power & Light] ,” she explained. “We’ve spent most of our time on issues we, the private sector, cannot change. We’re going to discuss the things we can do as a private sector.


“We can advise our energy company. We can’t make them change the cost, decide what source of energy, fuel they’re going to use. We can reduce our cost of energy by smarter use of energy.


“We all have water, but we don’t have the tap on 24/7. We do that with energy. We bleed energy.” Ms Deal said reducing the number of electrical devices used, and regular cleaning and maintenance of air conditioning units, were some of the simple measures towards achieving that 30 per cent consumption reduction.


She added that this would also lower the demand load on BPL, enabling it to do “preventative maintenance as opposed to crisis maintenance”, while better preparing the Bahamas for renewable energy.


“We really do have to reduce consumption to prepare for alternative energy,” Ms Deal said, adding that the Bahamas is one of five countries that could be submerged by sea level rise as part of global warming.


Edison Sumner, the Chamber of Commerce’s chief executive, said the private sector organisation planned to create a registry of all companies and individuals involved in renewable energy, whether as equipment suppliers or installers.


Ms Deal added that providers of energy efficiency devices would also be included, with the intention of the registry acting as “a one-stop shop” for developers and investors coming to the Bahamas with plans to ‘go green’.


Mr Sumner added that it was now time for the Bahamas to “move forward” in embracing renewable energy more fully, amid the wait for the Government and Utilities Regulation and Competition Authority (URCA) to develop the ‘rules of the game’.


Many observers view the development of a regulatory regime as painfully slow, with URCA opting for a ‘net billing’ arrangement when it comes to renewable users selling surplus energy back to the BPL grid. Those in the industry have argued that this lengthens the investment ‘pay back’ time for those willing to take up alternative energy.


Mr Sumner said the Forum was intended to keep alternative energy before the private sector and Bahamian public, acknowledging that such discussions tended to ‘die down’ as soon as global oil prices decreased.


“We’ve been such a reactive society,” he told Tribune Business. “We react to things. We’re not known for being proactive in our approach to this.”


Ms Deal emphasised that the private sector needed to drive renewable energy usage in the Bahamas, added that persons complaining about regulatory uncertainty needed to demonstrate it was not “all talk” when then the necessary clarity was provided.


Among the speakers set to feature at the upcoming Forum are the world’s “largest manufacturer of electric cars; a local architect who will address the Bahamas Building Code and changing construction practices; and a Canadian urban planner and winter resident of the Bahamas.


Dr Nicola Virgill-Rolle will address how renewable energy ties into the ‘Sustainable Nassau’ initiative, and Ms Deal said the former Jamaica Public Service (JPS) chief executive would explain how they “took the company from red to black” by adopting smart meters and improving relations with the private sector.


A session on ‘Disaster Management’ will also assess the lessons that the Bahamas can learn from the 2017 hurricane damage inflicted on solar farms in Puerto Rico, Texas and Florida.




Category/ies:Bahamas Articles, Clean Energy, Energy Security, Funding Source, Green Building, Regional Articles, Renewable Energy.
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