Americas Competitiveness Forum V

RenewableEnergy BestPracticesinPromotionandUse forLatinAmericaandtheCaribbean

Author:AndreaLuecke

Santo Domingo, Dominican Rep. October 5-7, 2011

RenewableEnergy BestPracticesinPromotionandUse forLatinAmericaandtheCaribbean

AndreaLuecke

PresentedattheFifthAmericasCompetivenessForumforthe InterAmericanDevelopmentBankandCompeteCaribbean SantoDomingo,DominicanRepublic,October57,2011

InterAmericanDevelopmentBank,2011 www.iadb.org Theinformationandopinionspresentedinthesepublicationsareentirelythoseoftheauthor(s),andnoendorsementbythe InterAmericanDevelopmentBank,itsBoardofExecutiveDirectors,orthecountriestheyrepresentisexpressedorimplied. Addressforcorrespondence:1300NewYorkAvenue,N.W.,WashingtonD.C.,20577.

Abstract
Theglobalenergymarketisinthemidstofadramaticevolution,slowlyshiftingawayfroman economybasedonfossilfuelsthatreliesoncheapfuelandresourceextractiontowardamarket economy focused on sustainability, reliability, innovation, and energy independence. Although renewableenergyaonlymakesup16percentoftheworldsenergyproduction,thereisnearly 1,320 GW of renewable energy capacity worldwide, employing over 3.5 million people (Renewable Energy Policy Network for the 21st Century [REN21], 2010). The evolution toward cleanenergyhasinspiredgenerationsand,asaresult,hasbecomeincreasinglypopular,growing by1.9percentperyearoverthepasttwodecades(MeisenandKrumpel,2009).

AccordingtotheRenewableEnergyPolicyNetworkforthe21stCentury(REN21),thenumberof countrieswithpoliciesdirectedatpromotingrenewableenergyhasdoubledoverthepastfive years (REN21, 2011). The United States, along with European and Asian countries, is actively promoting renewable energy to catalyze and achieve profound economic and environmental changes.Bycontrast,thecountriesofLatinAmericaandtheCaribbean(LAC)havebeenslowto adoptrenewableenergybecauseofpoverty,lackofawareness,andlackofgovernmentsupport to mitigate climate change, stabilize energy supplies, or invest in innovation (UN Industrial Development Organization, 2011). Although U.S. renewable energy markets are still emerging and over a dozen LAC nations rank higher than the United States in an Environmental Performance Index study (Yale University, 2010), there is a lot to be learned from the United States experience in promoting clean energy technologies. A robust and comprehensive renewableenergymarketinLAC,equaltoorgreaterthanthatintheUnitedStates,mightnot only trigger a wave of innovation, but could open previously untapped opportunities for economicgrowth.And,aswithmostnewtechnologymarkets,themorethepublicandprivate sectorsinvestinrenewableenergy,themoreaffordableitbecomes.
Throughoutthisdocument,renewableenergyisdefinedasbiomass,windpower,geothermal,hydropower,and bothsolarelectric(PV)andsolarthermal.
a

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For the purpose of this paper, all dollar amounts are in U.S. dollars, the term Latin America refers to all Central American and South American nations and Mexico, the term Caribbean refers to the island nations, and the acronym LAC refers to both Latin America and the Caribbean. Given this broad topic, this paper aims to present a snapshot of some of the best practicesinthepromotionanduseofrenewableenergy,andprovidepracticalexamplesofthe developmentofrenewableenergymarketsthatcountriesinLACcanreplicate.Thisbriefstudy providesanoverviewofsomeofthemostwidelyusedrenewableenergytechnologies.Italso examines current and potential renewable energy markets in LAC, economic development benefitsofexpandingrenewableenergymarkets,policytoolsandmechanismsthathavebeen used to build and promote renewable energy in the United States, and the role governments and the private sector can play. Finally, this paper presents a few recommendations for LAC countries. There are two tables in the appendices. One shows where renewable energy incentives exist in LAC and the other where renewable energy markets are in active developmentinLAC.

ThispaperbenefittedfromtheeditorialinputofSheilaMahoney.

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TableofContents
Abstract.........................................................................................................................................................2 OverviewofCommonRenewableEnergyTechnologies..............................................................................5 EnergyinLatinAmericaandtheCaribbean .................................................................................................6 . RenewableEnergyMarketsinLatinAmericaandtheCaribbean................................................................7 Bioenergy.................................................................................................................................................9 Wind..........................................................................................................................................................9 Geothermal.............................................................................................................................................10 Hydropower............................................................................................................................................10 Solar........................................................................................................................................................11 EconomicDevelopmentBenefitsofExpandingRenewableEnergyMarkets.............................................12 JobCreation............................................................................................................................................12 ExportsandDirectValue.........................................................................................................................13 LandOwnership,Property,andAssetValue..........................................................................................13 ImprovedRegionalEconomicCompetitiveness .....................................................................................14 . MarketDriversandBestPractices..............................................................................................................14 RenewablePortfolioStandard................................................................................................................15 NetMeteringRegulations.......................................................................................................................16 FederalTaxCreditsandGrants...............................................................................................................17 StateandLocalRebatePrograms...........................................................................................................17 CommunityandGroupPurchasing.........................................................................................................17 ThirdPartyOwnership............................................................................................................................18 PermittingandInterconnectionProcesses.............................................................................................19 PublicandPrivateSectorRolesinAdvancingRenewableEnergy..............................................................20 ProgramCreation....................................................................................................................................20 PublicPrivatePartnerships....................................................................................................................20 PublicEducation......................................................................................................................................21 WorkforceDevelopment........................................................................................................................22 MultinationalCollaboration....................................................................................................................22 ConclusionandRecommendations............................................................................................................23 AcronymKey...............................................................................................................................................27 AppendixA:CurrentRenewableEnergyIncentivesinLAC........................................................................28 AppendixB:CurrentRenewableEnergyMarketsinLAC ...........................................................................29 . Bibliography................................................................................................................................................30 References..................................................................................................................................................32

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OverviewofCommonRenewableEnergyTechnologies
Bioenergy: Biofuel and biomass energy constitute the fastest growing renewable energy sectorsintheworld.Arangeoforganicwasteproductsorotherorganicmatter(woodchips, excessvegetation,excesscookingoil,sugarcane,soybeans,etc.)canbeburnedandconverted to energy at an 8090percent efficiency rate to produce electricity or fuel (Biomass Thermal Energy Council, 2010). This makes biomass a very attractive fuel option in lessdeveloped regions where conventional fossil fuel resources, such as butane or kerosene, are limited or expensive but resources such as organic plant or animal waste are abundant and cheap to obtain.IntheUnitedStates,someutilitiesareconvertinghumanwaste,trappingliquefiedgas, and/orfarmingalgaetoproduceelectricityandfuelinthesamemanner. WindEnergy:Electricityproducedbywindturbinesisalsoontherise.In2010,40percentofall newelectricitycapacityaddedtotheU.S.gridwasproducedfromwindpowerprojects(AWEA, 2011).Theglobalwindenergyindustryhasgrownatarateofroughly25percentperyearsince 1990, making wind energy the second fastest growing renewable energy sector worldwide (MeisenandKrumpel,2009).Whilesomewindpowersystemsareidealforresidentialuse,most oftheelectricitygeneratedfromwindpowerisfromlarger,utilityscalesystems. Geothermal Energy: Because it is largely underground, geothermal energy is oneof the least publicly understood renewable energy sources. However, there is enough global geothermal capacitycurrentlyinproductiontopower5.7millionhomesperyear(REN21,2011).Bytapping the heat below the earths surface, electricity can be generated using a steam turbine, while pumpscancaptureheatforresidentialandcommercialuse.Geothermalsystemscanalsouse theambienttemperaturefoundjustafewmetersunderground,wheretheairisataconstant 55degreesFahrenheit.Sitesnearplateboundariesorvolcanicactivityareespeciallywellsuited forgeothermalelectricityproduction. Hydropower: Hydropower is the most commonly used renewable energy source. In 2008, 15percent of all electricity worldwide was produced by hydropower (REN21, 2011). Hydropower uses moving water and gravity to produce electricity from a turbine. Some analysts,however,donotconsiderhydropowertobeasustainableenergysourcebecauseof the environmental impacts of creating dams that can disrupt the natural flooding patterns of lakesandrivers,causingunintendeddamagebothupanddownstream. SolarEnergy:TheU.S.solarindustrysaw67percentgrowthfrom2009to2010,makingitthe fastest growing energy sector and one of the fastest growing industries in any sector in the UnitedStates(SolarEnergyIndustriesAssociationandGTMResearch,2010).Solarenergyuses

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either sunlight or the heat from direct sunlight to produce electricity or generate energy for heating or cooling. Solar photovoltaic panels produce electricity while concentrating solar power (CSP) systems use highly reflective mirrors to concentrate the suns energy to heat a mediumthatcanbeusedtopoweraturbineandproduceelectricityonautilityscale.Finally, solarheatingandcooling(SHC)systemscanbeusedtoheatorcoolairorwaterforbuildings andpools.Germanyhastheworldslargestsolarmarketandgetsnearly2percentofitstotal electricityfromsolar.Ontheotherhand,solaronlymakesupabout0.01percentoftheUnited States energy mix. Although Germany is not particularly sunny, it has installed 17,000 MW whiletheentireUnitedStateshasinstalledamere1,000MW.

EnergyinLatinAmericaandtheCaribbean
With so many countries, tax structures, electricity rates, political ideologies, geographic conditions, and national sentiments, it is difficult to make generalizations about the energy sectorinLAC.Theonlyappropriategeneralizationisthatfossilfuelsandestablishedformsof renewableenergy,suchashydropowerandbiomass,playsuchalargeroleinLACthatnewer, lessestablishedrenewableenergytechnologiesfacemajorobstaclestogainingmarketshare. IntheCaribbean,roughly93percentofcommercialenergyconsumptionispetroleumproducts (Fevrier, 2011) and over 97percent of overall electrical power is generated by fossil fuels (Schwerin,2010).Consideringmanyanalystscalculatethatworldwidepeakoilproductionhas alreadyoccurred,bcontinueddependenceonthesedwindlingresourcescreatesnationalenergy andeconomicsecuritychallengesforimportreliantnations.WiththeexceptionofTrinidadand Tobago, most Caribbean nations must dedicate large portions of their national GDP to importingenergy(Schwerin,2010).IntheCaribbean,nationalGDPrangesfrom$0.4billionin Dominicato$45.8billionintheDominicanRepublic(GernerandHansen,2011).Toputthisinto perspective,ExxonMobils2010revenuewas$383billion(Krass,2011). Tomakemattersworse,regionalelectricitygenerationwillhavetoincreaseby145percentby 2030toaccommodatepopulationgrowthandtheaccompanying75percentincreaseinenergy demand predicted by the InterAmerican Development Bank (Arnson, Fuentes, and Rojas Aravena,2008).ThiswillbeespeciallyapplicabletonationssuchasHaiti,wherelowelectricity rates and large populations already increase demand for power. Additionally, energy costs in theregionaregenerallycontrolledbyprivateutilitycompaniesthathaveenjoyedlongstanding monopolies.EnergycostsintheCaribbeanareamongthehighestintheworld,withestimates

Peak oil is defined as when the maximum rate of global petroleum extraction is reached and the rate of productionstartstodecline.
b

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ranging from as low as $0.20 per kWh (Schwerin, 2010) in Trinidad and Tobago to as high as $0.38perkWh(McClintock,2011)inBarbados.cComparatively,theaveragecostforelectricity in the United States is approximately $0.12 per kWh. Considering the cost of power, it is no surprisethatoffgriddieselgenerators,whichcausesignificantpollution,aresocommonplace. Although the high cost of energy negatively affects many people and businesses (34 million people are without electricity in LAC), high energy costs can be a tremendous catalyst for renewable energy production. Hawaii, for example, has the most expensive electricity in the UnitedStatesat$0.25perkWh.Asaresult,thestatehasmadeanaggressivepushformore renewable energy incentives and policies, creating, in the process, one of the most robust renewableenergymarketsintheUnitedStates. Notwithstanding the economic and security benefits, there is another compelling reason for Caribbeannationstoincorporaterenewableenergyintotheirenergyportfolio:climatechange. Itisestimatedthata0.5meterriseinsealevelwillsubmerge38percentofCaribbeanbeach land (Schwerin, 2010). This seemingly insignificant increase in sea level could have dramatic effectsonpeoplesaccesstoenergy,theirlivelihoods,andtheirbasicsafety.

RenewableEnergyMarketsinLatinAmericaandtheCaribbean
Becauserenewableenergyislocallysourced,clean,andabundant,itisconsideredameansto increasing energy security, yet renewable energy in LAC accounts for only 23percent of the regionstotalenergyproduction(UNEP,2010).SouthAmericageneratesalmost29percentof its energy from renewable sources, which, compared to the global renewable energy production average of 13percent, is impressive (Meisen and Krumpel, 2009). However, the majority of South Americas production comes from hydropower and bioenergy, which are bothassociatedwithnegativeenvironmentaleffects. Hydropowerenergyproductionisnotreliableduringlongperiodsofdroughtorlowrain levels and can affect flood cycles of rivers and waterways, thereby, increasing the chanceofdrought. Biomass is often obtained from deforestation or through other nonsustainable methods.Forexample,nearly40percentofGuatemalasenergyiswoodfuelobtained bywhatarearguablyconsiderednonsustainabledeforestationmethods.Furthermore, bioenergy crops such as sugar cane and soy necessitate the use of fertilizers that contain nitrates and phosphates that cause pollution runoff. Finally, because it takes

OthercountrieswithhighelectricitycostsincludeGuyana,SaintKitts,Nevis,andPuertoRico.

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approximately one gallon of gasoline to produce one gallon of ethanol, the fuel, although better than petrol, is not as sustainable as other renewable energy sources (Tickell,2008). Thisisnottosaythatsolarandwindhavenoassociatedenvironmentaleffects,buttheirimpact tendstobelessthanlargescalehydroandbioenergyapplications. To help foster strong, sustainable and vibrant renewable energy markets in LAC, various organizations and programs have been formed. Although there are many other organizations workingtopromoterenewableenergy,thefollowingaresomeofthemostprominentagencies: The Caribbean Renewable Energy Development Programme (CREDP), based in Saint Lucia, was created in 1998 and consists of 16 Caribbean countries that aim to break downmarketbarriersandnurturethecommercializationofrenewableenergy. The Caribbean Council for Science and Technology (CCST), based in Trinidad, connects nationalgovernmentsincommercializingscienceandtechnologyinnovations.Since1980, CCSThashelpedfacilitatethemutualtransferoftechnologiesacrossnationalborders. TheInstituteoftheAmericas(IOA)wasformed25yearsagotoencourageinformation sharinginenergyandtechnologymarketsbetweentheUnitedStates,Canada,andLatin America. TheLatinAmericanandCaribbeanCouncilonRenewableEnergy(LACCORE)functions asaplatformforinteractioninLACthroughtheorganizationofconferences,webinars, seminars, workshops, forums, and trade shows. Additionally, LACCORE provides industry leaders in the region with expert information on the adoption of renewable energytechnologies. TheWorldwatchInstitutesEnergyandClimateprogramispromotingrenewableenergy in the Dominican Republic and Haiti. Work in the Dominican Republic includes a renewableenergyroadmapfortheNationalEnergyCommission. The Latin American Wind Energy Association (LAWEA) provides information about the wind market throughout Latin America to promote the industry and help bring in foreigninvestment.

Effortslikethesehaveledtomodestgrowthintheregionsrenewableenergyindustry.Though somerenewableenergysectorsaregrowingfasterthanothers,globallyrenewableenergyuse isontherise.AccordingtotheUnitedNationsEnvironmentProgramme(UNEP),investmentin renewable energy grew 32percent in 2010, and the global industry is valued at a record breaking$211billion.Interestingly,UNEPalsofoundthatdevelopingcountriesareinvestingin

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renewable energy faster than developed countries (Burger, 2011). Understanding the role renewableenergyplaysinLACiscriticalindeterminingthebestwaytomovetheregiontoward acleanenergyeconomy.

Bioenergy
Current:BiofuelsarebyfarthedominantrenewableenergysourceinLAC,accountingforover 12percentoftheregionstotalenergyportfolio(UNEP,2011).Brazilproducesalmostallofthe worldssupplyofsugarderivedethanolfuels(REN21,2011).Othermajorbiofuelproducersand consumers include Guyana, Honduras, Nicaragua, ElSalvador, and Colombia (Meisen and Krumpel,2009).Today,50percentofBarbadosenergysupplyisrenewablesugarcanewasteand bagasse(thefibrousmatterthatremainsaftersugarcanestalksarecrushedtoextracttheirjuice) (MeisenandKrumpel,2009). Potential: Expanding sustainable biomass and biofuel markets is well within the grasp of LAC countries. However, traditional energy practices that are nonsustainable, as in the case of Guatemalasuseofwoodfuel,shouldbeeliminatedorconvertedtomoresustainablepractices. Considering the agriculture infrastructure that is already in place, there is considerable market potentialforbiogasdevelopment.Forexample,one400kilogramfarmanimal,suchasacow,can produceupto20kilogramsofsolidwasteperday.Thewastecanbeusedinadigesterthatuses naturallyoccurringgasesfromthedecompositionprocesstogenerateenergy.Thisisalsotrueof plant waste. Existing maps of farmland could be used as a reference for implementing a sustainablebiogasmarket.Furthermore,thereisgreatpotentialforLACcountriestogrowalgae andconverthumanwasteorlandfillgasintosustainablefuelsources.

Wind
Current: Wind markets in Latin America are either underdeveloped or not developed at all. While Brazil and Argentina have developed wind maps to encourage development, few investors have shown interest. In 2008, Brazil and Uruguay were the only nations in South America to have installed largescale wind farms. Caribbean wind markets are substantially moredeveloped.Despitebeingasmallislandnation,Barbados,arenewableenergychampion intheCaribbean,beganusingwindenergytopumpwaterintoirrigationsystemsaslongagoas the 1600s (Schwerin, 2010). Additionally, the Dominican Republic has roughly 100MW (with 63MWcurrentlyunderdevelopment)andJamaicahasanother20MWofwindenergycapacity currentlyinstalled(GernerandHansen,2011). Potential:ThereisterrificpotentialfordevelopingawindmarketinLAC.Whilesomelocalities are conveniently exposed to global trade winds, others experience temperature fluctuations

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that,whencoupledwithelevationchanges,canproducestrongandreliablewindyearround. The Dominican Republic is estimated to have roughly 3,200MW of potential wind power availableover460squarekilometers.WindpotentialinBrazilisexpectedtosupplythecountry withroughly4.7GWofcapacityby2030(WorldBank,2010).OthercountriesinLAClikelyhave as much potential. To understand where to best locate future wind infrastructure, more comprehensiveresourcemapping(whichrequiresgovernmentandprivatesectorinvestment) isneeded.

Geothermal
Current: Geothermal power generation in LAC accounts for only 0.5percent of the regions energy supply (UNEP, 2010) and is heavily dictated by a countrys proximity to plate boundaries, volcanoes, and hot spots. Geothermal power does, however, play a large role in somecountriesenergyportfolios.InCostaRica,forexample,moreelectricityisderivedfrom geothermal sources than fossil fuels (McDermott, 2009), thanks to the countrys convenient locationneartheCircumPacificSeismicBelt(CPSB).Smallscalegeothermalpowergeneration canbefoundelsewherearoundtheCPSBinElSalvador,Mexico,andNicaragua,butstilldoes notplayadominantrole.Geothermalpowergeneratesover3,189GWhofelectricityperyear in the Caribbean. Guadeloupe, for example, has had a 15MW geothermal plant since 1986. ProjectsarealsofoundinSaintLucia,Dominica,andNevis.IntheCaribbean,geothermalpower couldpotentiallylowerelectricitycoststo$0.15perkWh(GernerandHansen,2011). Potential:Withitsmultipleplateboundaries,Mexicohastremendousgeothermalpotential.The coasts of Colombia and Ecuador also have a number of potential geothermal sites where the Nazca and South American tectonic plates meet. Furthermore, nations in the eastern and northernmostparts of theCaribbeanarewell situated for geothermal power production, with between 450MW and several thousand megawatts of potential capacity (Gerner and Hansen, 2011). Nevis and Grenada, for example, have an estimated 300MW and 400MW of potential capacity,respectively,thathasyettobedeveloped(GernerandHansen,2011).CREDPhasbeen exploring strategies to develop geothermal systems in Saint Kitts, Nevis, Dominica, and Saint Lucia. Some estimates predict up to 300 TWh per year of geothermal power is possible in LAC (YepezGarcia, Johnson, and Andres, 2010), and a developed geothermal market in the Caribbeancouldprovideelectricitythatwouldcost$0.12to$0.15perkWh(Joseph,2008).

Hydropower
Current:HydropowerplaysanextensiveroleinLACscurrentenergyportfolio,accountingfor roughly8.5percentoftheregionstotalenergysupply(UNEP,2010).Largehydrodamsprovide substantial electric power for many countries, while existing as the only renewable energy
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sourceinothercountries.Microhydropowerusessmallscalehydrogenerationtechnologythat producesupto(buttypicallynotmorethan)100kWofelectricpower.Becauseoftheirsmall size,theenvironmentalimpactofthesetechnologiesissmallerthantheirlargercounterparts, which has led to a recent increase in popularity. In LAC, almost all countries have developed hydropowerinfrastructure.IntheCaribbean,hydropowerisusedbyDominica(7.6MW),Haiti (62MW), Jamaica (43MW), the Dominican Republic (472MW), and Saint Vincent (6MW), to nameafew(GernerandHansen,2011). Potential:HydropowerholdsgreatpotentialinSouthAmerica,especiallyaroundtheAndesand other regions with substantial elevation changes. While these elevation changes are not as common in the Caribbean, there is still potential. For example, even in countries where hydropoweralreadyexists,themarketcanbeexpanded.Notwithstanding,allnationsmustbe cognizantoftheproblemsassociatedwithhydropowerduringperiodsofdrought,lowrainfall, orexcessiveenergyuse,aswellasthedamagetotheecosystemsbothupanddownstreamof dams.

Solar
Current: A few countries, including Mexico, Argentina, and Colombia, have developed solar irradiance maps to show where solar energy production is best suited and to encourage industry development. Beyond acknowledging the potential for a solar energy industry, it remainsonlyanichemarketinselectcountriessuchasBarbados,SaintLucia,andGrenada.This lackofmarketdevelopmentinothercountriesismostlikelycausedbythehighcostrequiredto installsolarpoweraproblemthatcanbeaddressedbysmartpolicies.Themorecommonuse ofsolarenergytechnologyintheCaribbeanisforheatingwaterinhomes.In2009,twooutof everyfivehomesinBarbadoshadasolarwaterheatingsysteminstalled,makingBarbadosthe thirdhighestpercapitauserofsolarwaterheatersintheworld.Achievingthis,however,was not a simple task. As seems to be the case throughout the Caribbean, great effort went into educatingandinformingthepubliconhowsolarwaterheatersworkandassuringtheresidents that they are safe and reliable (Schwerin, 2010). Barbados high electricity rates were also a factorinadoptingsolar.Countrieswithlowerelectricityrates,suchasTrinidadandTobago,will inevitablyhavemoredifficultytransitioningtowardrenewableenergy. Potential: In terms of availability and potential, solar energy stands to play a large role throughoutLatinAmerica,theCaribbean,andtheworld.TheU.S.DepartmentofEnergy(DOE) states that in one hour enough sunlight falls on the surface of the earth to power all of the earthselectricalneedsforayear(DOE,2011a).Germanyistheworldslargestsolarconsumer andproducer,yetitssolarresourceisinferiortothatinmostoftheWesternHemisphere.In
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fact,GermanyssolarresourceisonparwithAlaskas.Ifasustainableandvibrantsolarmarket istotakeroot,longterminstitutional,financial,andothernecessaryinfrastructuremustbeput inplace. In its 2010 paper Analysis of the Potential Solar Energy Market in the Caribbean, CREDP identified anumber of obstacles and firststep requirements for a suitable retailsolar energy markettodevelopintheCaribbean.Themainobstaclesidentifiedwerelackofinformationand lack of resources (financial, grid development, and workforce). CREDP recommends that, to overcometheseobstacles(commonlyfoundthroughouttheworld),nationsneedto educatethegeneralpublicandlocalgovernmentsaboutsolartechnologies; compileaninventoryofhowmuchsolarisalreadyinstalledandhowmuchmoresolaris possible(inMWs); understandtheavailabilityofresourcesandcurrentinfrastructure; put the appropriate institutional support in place to facilitate and encourage such a market.

CREDPpointsoutthatthesefourrecommendationscanbeappliedtoalltherenewableenergy technologies,notjustsolar.

EconomicDevelopmentBenefitsofExpandingRenewable EnergyMarkets
Therearedirectandindirectbenefitsinherentintheformationofacomprehensiverenewable energyindustry.Savingenergyandmoneyareconsidereddirectbenefits.InManlius,Illinois,for example,a660kWwindturbineproducesenoughelectricitytosavethelocalschoolsystemover $100,000peryearinavoidedfuelandelectricitycosts(Windustry,2006).Keepinginmindthat nearly75percentofallcleaneconomyjobsintheUnitedStatesarelocatedinthetop100largest metro areas, densely populated urban areas in LAC will likely have the most opportunity to generatedirectorindirecteconomicdevelopmentbenefits(Muro,Rothwell,andSaha,2011).

JobCreation
As the world continues to recover from the global recession of 2008, job creation becomes increasingly important. Globally, biomass employs approximately 1.7 million people, solar employs approximately 665,000, wind employs approximately 630,000, hydropower employs approximately 40,000, and geothermal employs approximately 20,000 people (REN21, 2011). Due to the demand for more renewable energy, Germany expects more jobs in renewable

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energy than in the automotive industry within the next decade, signifying a shift in national priorities. The United States is experiencing its own shift. According to The Solar Foundation, theU.S.solarindustrycurrentlyemploysover100,000workers(TheSolarFoundation,2010), which is more than the U.S. steel production sector. These jobs are spread across the entire value chain and include everything from lawyers and accountants to manufacturing, roofing, andplumbing. Although U.S. manufacturing jobs are at their lowest since before World War II, approximately 26percentofallcleanjobsareinmanufacturing(Muroetal.,2011).Solarmanufacturingjobsare expected to grow 14percent between 2011 and 2012 (compared with overall manufacturing, wherejobsareexpectedtodeclineby2.6percentoverthesameperiod)(TheSolarFoundation, 2010). It is not easy to compete with Asia on lowcost manufacturing, but at least one Latin Americannation,Mexico,isbeginningtoattractmultinationalrenewableenergymanufacturers because of itslowercostlaborandless stringentenvironmentalregulations.In 2009,Japanese company Sanyo, for example, opened a solar photovoltaic (PV) module manufacturing plant in NuevoLeon,Mexico,toreducemanufacturingcostsforproductssupplyingtheU.S.andCanadian markets(RenewableEnergyWorld,2009).

ExportsandDirectValue
Manufacturingrenewableenergyproductscanleadtoexportopportunities.Areportreleased by the Solar Energy Industries Association and GTM Research in August 2011 found that the UnitedStatesisanetexporterofsolarenergyproductsandistheworldsleadingexporterof polysiliconforsolarPVpanels(muchofwhichGermanyimports).Theseexportspumpmoney backintolocaleconomiesintheformofdirectvalue.Althoughtheentiremarketgrewto$6 billionin2010,thereportalsofoundthat,in2010,theU.S.solarindustrycreated$4.4billionin domestic direct value, signifying that $0.75 out of every $1 spent on a U.S. solar installation founditswaybacktothelocalU.S.economythroughwagespaidtodomesticmanufacturers, installers, etc. By investing in locally grown and produced energy sources, money that would otherwisebespentonenergyimportscanbesaved,capitalizedonthroughreturninvestments, or spent on small business enterprises and national infrastructure projects. As renewable energy manufacturing increases and trade connections are created, direct value begins to accumulate,helpingtocontributetoanationsGDP.

LandOwnership,Property,andAssetValue
One of the most basic byproducts of renewable energy is an increase in property and asset values.IntheUnitedStates,thereisnewevidencethatthepresenceofasolarPVsystemona house leads to greater resale value. In California, homes with a 3 kW PV system sold for an
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averageof$17,000morethancomparablehomeswithoutPV(Hoenetal.,2011).Anddespite being restricted by local laws, landowners that lease their property to project developers for wind, solar, geothermal, or hydropower are often able to profit. The City of Chicago, Illinois, leaseda40acreplotofformerindustrialland(landwithlimitedreusevalue)toitslocalutility tobuildasolarfarmandwillbringin$110,000inrevenueperyearthroughthearrangement. The City of Las Cruces, New Mexico, is also working on a solar land lease and stands to earn $2.3millionoverthelifeoftheproject.

ImprovedRegionalEconomicCompetitiveness
A new renewable energy market can also stimulate regional economic competiveness by inducingnewprivatecapitalinvestments.AccordingtoBloombergNewEnergyFinance,inthe yearendingJune2011,newinvestmentincleanenergyrose22percent(nowat$41.7billion globally) (Downing, 2011). A successful renewable energy market would help stabilize long termenergyprices,actingasahedgeagainstrisingelectricityrates.Relianceonenergyimports wouldalsobereduced,thussavingratepayersmoney.Amanufacturingfirm,forexample,may choose to locate in a region with abundant clean electricity to avoid costly environmental controlsorregulations.Finally,theexistenceofoneortworenewableenergybusinessesina regioncancreateaclusteringeffectofcompaniesthatoperateupanddownthesupplychain. Allthishelpstomakearegionmoreeconomicallyattractive,andthereforecompetitive.

MarketDriversandBestPractices
Although renewable energys role in the U.S. energy economy is highly publicized and hotly debated,itisstillanemergingphenomenon,facingformidableobstaclesinachievingscale.In theabsenceofanationalcleanenergystandard(orothernationalstandardsthatmandaterate design, job training, permit issuance, financing underwriting criteria, etc.), fragmentation persists.Theprimaryresultoffragmentationisincreasedcosttoimplementrenewableenergy. Intheabsenceofnationalstandardsand/ortransparentprocesses,thetimeittakeseachstate and/orauthorityhavingjurisdiction(AHJ)todesignindividualizedpoliciesandprogramsdrives upthecostofimplementation.Italsoincreasesthelevelofcomplexityforrenewableenergy contractors,aseachstateand/orAHJmayoperateunderdifferentrulesandregulations(again, increasing the cost of the renewable energy system). Even though some renewable energy technologies,suchassolar,arerapidlybecomingmoreaffordable(andinsomeU.S.statesare equallyasaffordableasconventionalfuels[Matz,2010]),thehighcostofrenewableenergyis stillabarrierinmostpartsofthecountry.

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InanefforttocultivatevibrantrenewableenergymarketsintheUnitedStates,bestpracticesin programdevelopment,ratedesign,financing,permitting,workforcedevelopment,andindustry engagement have emerged. In the United States, AHJs with municipally owned utilities have morepolicyoptionsbecausemunicipalitiescandirectlyaffectutilityoperationsandpractices. Conversely,AHJshavelesscontroloverinvestorownedutilities,whichareregulatedbystate publicutilitiescommissions.Regardless,supportiveandtransparentpoliciesandprogramsatall levels of government are an important aspect of the advancement of renewable energy. The followinghighlightsafewofthefinancial,regulatory,andindustrybestpracticesthatholdthe mostpromisefortransformingtherenewableenergymarketinLAC.

RenewablePortfolioStandard
Concept: Political will and utility participation are two of the most important factors in the developmentofrenewableenergyintheUnitedStates.Withoutthese,anationalcleanenergy standard, or a Renewable Portfolio Standard (RPS), may never be adopted. An RPS is a regulationpassedandenforcedatthestatelevelthatrequiresacertainpercentageofenergy productiontobefromrenewableenergysourcesbyaspecificdate.d Inpractice:IntheUnitedStates,39statesandtheDistrictofColumbiahaveenactedanRPSor comparable standard. Californias goal is to have 33percent of its energy needs supplied by renewablesourcesby2020,whileNewYorksgoalis29percentby2015.InNovember2004, Colorado became the first state to create an RPS by ballot initiative when voters approved Amendment 37. Since 2004, Colorados RPS has been increased twice by ballot initiative, signifyinghowimportantrenewableenergyistovoters.Adirectresultofastateadoptingan RPS is its ability to establish tradable renewable energy credits (RECs), an important market drivenmechanismfordrivingdowntheoverallcostofaproject.InNewJersey,solarrenewable energy certificates (SRECs) have been largely responsible for the boom of the states solar market. SRECs allow developers to build solar farms and largescale solar projects while receiving highly valued certificates for the electricity produced from them. Ultimately, this incentivelowersthecostofoverallprojectdevelopmentbecauseitallowssomeoftheinitial project capital investment to be recovered through power production. SREC markets can be complicated to analyze and evaluate; however, solar businesses have arisen to meet these challenges through brokering, aggregation, and webbased auction systems. These

Eligible technologies might include solar water heat, solar thermal electric, solar thermal process heat, photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal electric, geothermal heat pumps, municipal solidwaste,solarlightpipes,biomassthermal,anaerobicdigestion,smallhydroelectric,tidalenergy,waveenergy, andfuelcellsusingrenewablefuels.
d

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intermediaryservicescommandaprice,buttheymaybeworthit.Thetablebelowshowsthe7 outof40countriesinLACthathaveanRPS. Existingrenewable energycapacityin 2008 35%

Argentina

Brazil Dominican Republic Jamaica Mexico

85% 7% 5%

Nicaragua Peru

27%

Other 1,000MWby2012and2,500MWby 2016.2012goalincludes:500MW wind,150MWbiofuels,120MWwaste toenergy,100MWbiomass,60MW smallhydro,30MWgeothermal, 20MWsolar,and20MWbiogas 7585%by2020 10%by2015 Wind:500MWby2015 25%by2025 10%by2010 7.6%by2012 Windpower4.34%,smallhydro0.77%, geothermal1.65%,andbiogas/biomass 0.85% 38%by2011 5%by2013
Source:REN21,2011. Note:Tablemaybeincomplete.

RPSGoal 40%by2015

NetMeteringRegulations
Concept: Net metering has been a useful tool in advancing U.S. renewable energy markets because it allows customers to be fairly compensated for the energy they generate. In those statesthatallowit,netmeteringenablesanelectricitycustomerwhohasarenewableenergy generating system to be credited for theexcess energy their system produces andreturns to thegrid.Netmeteringcanbetrackedbysimplyenablingthecustomerselectricmetertorun backwards as they produce electricity and run forward as they consume electricity. The customer is charged or credited the difference. Fortythree states in the United States have adoptednetmeteringpracticesandregulations. In practice: The State of Utah requires its only investorowned utility, Rocky Mountain Power (RMP), to offer net metering to customers who generate electricity using solar, wind, hydropower,hydrogen,biomass,landfillgas,orgeothermalenergy.Netmeteringisavailablefor residentialsystemsupto25kWandnonresidentialsystemsupto2MWincapacity.RMPwill issueakWhcreditformonthlynetexcessgenerationproducedbythenetmeteringfacilityand

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apply that credit to the next billing period. Large commercial customers that produce excess generationmaychoosebetweenvaluingexcessgenerationataratebasedonavoidedcostsorat analternativeratebasedonutilityrevenueandsales(DOE,2011b).

FederalTaxCreditsandGrants
Concept:TheEnergyPolicyActof2005andAmericanRecoveryandReinvestmentActof2009 createdtaxincentivestoencourageresidentialandcommercialrenewableenergydevelopment intheformofanInvestmentTaxCredit(ITC)and1603TreasuryProgram.Thefederalprograms credit or grant a taxpaying entity 30percent of the costs related to the installation of a qualifiedrenewableenergysystem(DOE,2011c). In practice: Tax credits for residential renewable energy systems help stimulate consumer interest,whiletaxcredits(orcashgrantsinlieuoftaxcredits)havebeeneffectiveinsparking project development and initiating industry growth. Since these incentives were first implemented in 2006, the cost of solar PV panels has declined 29percent, largelydue to the surgeofproductsinthemarket,drivingthecostperunitdown.

StateandLocalRebatePrograms
Concept:Topromoterenewableenergyadoption,manystatesandAHJsprovidedirectfunding for system design and installation. Utilities may also provide their own rebates with varying conditions or stipulations, many based on system performance, system certification, installer credentials, etc. Rebate programs offer customers the opportunity to recover some of their initialcapitalinvestment. In practice: Wind energy is one of the great renewable energy success stories in the United Statesbecauseofitsversatilityandrangeofapplications.TheLongIslandPowerAuthorityin NewYorkmanagesaperformancebasedrebateprogramforresidentialandcommercialwind installations. Residential installations may earn up to $3.50 per kWh for a maximum of 16,000kWh per year, while commercial installations may earn a $0.50 per kWh rebate for annualproductionbetween16,000and175,200kWh.

CommunityandGroupPurchasing
Concept:Acommunitypurchaseoccurswhenmorethanonepartysharesintheownershipofa renewable energy system (usually wind or solar). A person may decide to participate in a communitypurchaseifheorsheresidesinahomethatisnotsuitableforindividualrenewable energyuse.Thisconceptisgrowinginpopularitybutiscontingentonlocallaws,sinceutilitiesare oftenexpectedtosplittheenergybillamongmanyusers.Incontrast,agrouppurchaseiswhen

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multiple parties wanting to purchase separate systems work together to place a bulk order. Workingtogetherallowsthemtobenefitfromwholesaleequipmentprices,reducedtransaction costs,andgreatereaseinnavigatingtheprocess. Inpractice:CommunityandgrouppurchasinghavehadimmensesuccessinPortland,Oregon, under the banner of the Solarize program. The program is designed to help individuals make informed decisions using a group dynamic. For example, the Solarize program helps to accelerateadoptionofsolarbyfacilitatingtheremovalofsomeoftheprocessdecisionssuchas whichcontractortohire,howlargeasystemtopurchase,howtopayforthesystem,orsimply wheretobegin.Communityprogramsnotonlysuccessfullypromotetheadoptionofrenewable energy,buttheyalsoplayamajorroleineducatingpeopleaboutitsbenefits.Thesetypesof programs are useful for regions (such as LAC) where there is a lot of public skepticism about neworforeigntechnology.

ThirdPartyOwnership
Concept: Thirdparty ownership arrangements are used by entities (such as governments, municipalities,schools,nonprofits,orothertaxexemptorganizations)thatarenoteligibleto receivefederalorstatetaxcreditsandbenefits,thosethatprefernottoownandmaintaina system,orthoselackingtheupfrontcapitalneededtoinvestinwindorsolar.Inathirdparty ownership arrangement, an entity hosts the system on its building or land, but the system is ownedbyaseparatebusinessorinvestorwhousestheavailabletaxcreditsandbenefitsand sellsthepowerproducedbythesystemtothehost.Benefitsofthirdpartyownershipinclude: increased ability of noneligible entities to take advantage of tax credits and depreciationbenefits; upfrontcostssubstantiallyreducedoreliminated; noresponsibilityformaintenance,operations,orsaleofSRECs; thirdparties can aggregate multiple investors to get discounts and better financing rates; predictablelowerenergycosts.

A disadvantage of thirdparty ownership may be high transaction costs for commercialscale installations.Thus,thirdpartyownershipinthecommercialcontexthastypicallybeenlimited to systems of 250 kW and above. Public agencies may also experience a varietyof obstacles, including debt restrictions, contract restrictions, competitive procurement requirements, or optimalsiteaccess.

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In practice: Sungevity is a U.S. company that offers thirdparty ownership in the form of residentialsolarleasing.Withoutanymoneypaidupfront,theydesignandinstallacustomized residentialsystem,thenleasethepanelstothehomeownerforalowmonthlyrate.Although thehomeownerdoesnotownthesystem,thecostoftheleasepayment(plusthesavingsof the reduced electricity bill) is generally less than what the homeowner was paying before installing solar, signifying immediate cost savings. Other prominent companies offering third partyleasesincludeSolarCityandSunRun.

PermittingandInterconnectionProcesses
Concept:Whilemanufacturinginnovationsandtechnologybreakthroughshavecutthecostof solarPVpanelsinhalfsince2009,thehighcostofsolarisstillafrequentlycitedbarriertowider adoption.Asaconsequence,reducingprocessorsoftcosts(i.e.,laborandoverhead),which accountforoverhalfthecostofaresidentialsolarinstallation,isnowanindustryfocus.The DOE believes that by reducing soft costs (or the time it takes to site, permit, install, and interconnect a system), the cost of solar may be reduced to as low as $1 per watt by 2017. However,withoutnationalstandardstofollow,statesandAHJscurrentlyusetheirownsetof procedures.Theresultisapatchworkofregulatoryhurdlesandprocesses,which,again,adds to the time and cost of installing a renewable energy system. Having an efficient, easily understandablestandardandfaircostsetof processesthataremanagedbyproperlytrained codeofficialswillhelptoreducethesesoftcosts. Inpractice: Thebestpermittingpracticesincludeemailandonlinetransactions,fairflatfees, overthecounterpermitissuance,andstandardizedpermitrequirements(VoteSolarInitiative, n.d.).Implementingthesebestpracticesrequiresthefullsupportoflocaljurisdictionsthatissue permits (Pitt, 2008). In 2007, the Sacramento Municipal Utility District (a municipal utility in California) pioneered streamlined permitting to ensure all AHJs in its service territory use a standard application template. Seven different AHJs signed on and developed measures that streamlined the process, including permitting fee waivers (for three years), a simple standardized application for small residential PV, and a commitment to overthecounter or onedayturnaroundforplanreviews(Cutlip,2011).

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PublicandPrivateSectorRolesinAdvancingRenewableEnergy
Thebestpracticesoutlinedintheprevioussectiondidnotoccurovernight.Theyaretheresultof several decades of government and private sector involvement and cooperation toward advancing renewable energy in the United States. Although development of the renewable energymarketremainsaconstantstrugglefortheUnitedStates,somepoliciesandapproaches are well suited for replication. Ensuring that the best possible legal, financial, regulatory, and institutional frameworks are in place is the responsibility of national governments and their privatesectorcounterparts.Informalunilateralactionsbygovernments,althoughnotbindingto theinternationalcommunity,helptomoverenewableenergyforwardandshouldbeconsidered.

ProgramCreation
The creation of a sustainable local renewable energy market requires a comprehensive and coordinated effort among many stakeholders. It is important to spend time in the beginning planning and analyzing, as the plan or roadmap that is created will serve as the legal and economic framework for renewable energy in the region for many years. It is of critical importancetoengageadiversegroupofstakeholdersandadvisors,suchaslocalgovernment, utilities, universities, business groups (local and foreign, small and large), entrepreneurs, international NGOs, banks, energy attorneys, concerned citizen groups, and more. Early engagementwillhelpensureactiveparticipationofallstakeholdersindevelopingtheplan,as wellaspersonalinvestmentinthelongtermviabilityoftheplan.Theroleoftheadvisorsisto helpdevelopasustainableworkplanandleverageresources.Ataminimum,advisorsshould committoprovidinginkindconsultation.

PublicPrivatePartnerships
While there is no strict rule for what makes a successful publicprivate partnership, team approachesareaprovenwayofencouragingrenewableenergymarkets.Coordinationamong government agencies and the private sector at the national or local level is challenging but achievable. Recognizing and supporting community individuality, promoting cooperation, addressingcommonneeds,andengaginginmutualproblemsolvingarekeystosuccess. Creatingandsustaininganattractivebusinessfriendlymarketlandscapeisalsoessentialforthe successful establishment and continued growth of any new industry. Governments must understandthemotivatingfactorsforrenewableenergycompaniestolocateinanewmarket. Different incentives are required for companies in different phases of development. For example,anestablishedforeignownedmanufacturingcompanywillbeinterestedindifferent perksorincentivesthanadomesticservicescompanythatiscurrentlyexpanding.

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Themostimportantincentiveforemergingindustriesandcompanies,perhaps,isgovernment leadership. Some cities in the United States have incorporated renewable energy into their longterm comprehensive planning. This decision not only affects energy procurement for municipallyownedbuildings,butitalsosendsamessagetorenewableenergybusinessesthat thereisstabilityandcertaintyinthemarket.Foracityorregionworkingtoattractinvestments, the perception of market stability is critical. Although the United States has not signed the Kyoto protocol, 1,054 U.S. mayors have demonstrated their commitment by signing the U.S. Conference of Mayors Climate Protection Agreement, vowing to reduce carbon emissions in theircitiesbelow1990levels(U.S.ConferenceofMayors,n.d.).EverycountryinLACexceptfor French Guiana and Puerto Rico has signed onto the Kyoto Protocol. Additionally, the Clinton ClimateInitiativeC40ClimateLeadershipGroupisagroupoflargecitiescommittedtotackling climate change with commitments from a few U.S. cities, as well as Mexico City, Caracas, Bogot, Lima, Buenos Aires, Rio de Janeiro, and So Paulo (Clinton Climate Initiative, 2011). Greenenergygoals,whetherinstitutedbythegovernmentortheprivatesector,areoftenthe firstandmostimportantstepinshowingleadership;however,thesegoalsmeanlittlewithout transparencyandaccountability. AnotherexampleofapublicprivatepartnershipistheU.S.EnvironmentalProtectionAgencys (EPA) Green Power Partnership. This partnership supports the procurement of clean power (solar, wind, geothermal, some biomass, and lowimpact hydropower) by companies. U.S. partnerorganizationsthatjoinmustbuygreenpowerinamountsproportionaltotheirannual electricity use. Partnering with the EPA can help small and large U.S. companies lower transaction costs associated with buying green power, reduce their carbon footprint, and communicatetheirleadershiptokeystakeholders(GreenPowerPartnership,2011).Finally,the DOErecentlylauncheditsSunShotprogram,whichisacollaborativenationalinitiativetomake solar energy technologies costcompetitive with other forms of energy. Through the SunShot program,theDOEwillprovide$50milliontoU.S.manufacturersinanefforttoreducethecost ofsolarenergysystemsby75percentbefore2020(SunShotInitiative,2011).

PublicEducation
Education is important in creating a retail renewable energy market, especially considering mostoftheworldsuffersfromenergyilliteracy.Forexample,manypeopleindevelopedand developingcountriesalikedonotknow1)howtoreadtheirutilitybill,2)wheretheirenergy comesfrom,3)howrenewableenergytechnologieswork,4)whatthetruecostsoffossilfuels are,or5)whatagreenjobis.Andtheyarenottoblame.Asaresultoftheabundanceofcheap energythroughoutthe20thcentury,especiallyintheUnitedStates,energyliteracycampaigns

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and efforts to promote the environmental benefits of renewable energy technologies have rarelybeenundertaken. The DOEs Solar America Communities Outreach (SACO) Partnership program is an excellent example of a widespread public education and outreach effort. Essentially, SACO conducts outreach to local governments across the United States that are interested in implementing solarpoliciesandprograms.Tobestacceleratesolarenergydeployment,theDOEencourages localgovernmentstotakeacomprehensive,holisticapproachratherthanaprojectbyproject approach. To support this, SACO implementing partners provide information to local governments about policies and regulations, financial incentives, workforce training best practices,andstrategiesforengagingutilitiesandmembersofthecommunity.TheDOEsSolar PoweringYourCommunity:AGuideforLocalGovernmentsservesasthefoundationforthese publiceducationefforts(SolarAmericaCommunities,2011).

WorkforceDevelopment
Job training and education is a common intersection point for the private sector and governments.Construction,operation,andmaintenancejobsareconstantlyevolving,changing, and expanding as new standards, best practices, and methods enter the market landscape. Investinginaskilledandqualityorientedworkforcehelpsprotecttheindustriessreputations. While funding by national or local governments may be required to help train the first few waves of workers, maintaining and developing the skills necessary to keep them masters of their craft is the role of the private sector. This ongoing education will ensure that private sectorcompaniesremaincompetitive.

MultinationalCollaboration
Finally, strong international partnerships are also needed to help renewable energy technologiestakeroot.TheOrganizationofEasternCaribbeanStateshasalreadydemonstrated the benefits of multinational collaboration. Though not exclusively focused on renewable energy development, the Electronic Government for Regional Integration Project is a collaborative effort among Grenada, Dominica, and Saint Lucia, with more than $6 million in funding from the World Bank, to help improve government transparency, publicprivate businessefficiencies,andthedevelopmentofamoreinvitingbusinesslandscapeforindustries. TheGrenadinesandSaintVincentarealsoconsideringjoiningtheprogram.Thisinitiativewill helpbusinessesexpandacrossnationalbordersandefficientlyconductbusinesswithmultiple governmentsatonce.Asimilarinitiativededicatedtotransparentrenewableenergystandards acrossnationalborderswouldhelpboostrenewableenergyinLAC.

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ConclusionandRecommendations
Establishingandnurturingacomprehensiveandstrongrenewableenergyindustryacrosssuch a vast landscape is no small challenge, yet the rewards are well worth the efforts. A well constructed renewable energy industry brings jobs, energy security, education in science and technology,andmoderninfrastructuredirectlytothecountriesthatneeditmost.Onamuch broaderscale,nationswillbenefitfromhavingamoreskilledworkforce,saferenvironmental conditions, increased trade opportunities, and improved multinational relations. Finally, and possibly most importantly, countries that invest in renewable energy will benefit from extraordinarysavingsonenergyimportsthatcanbereinvestedinlocaleconomiesratherthan sent abroad. The global trend toward renewable energy is not just a market shift within the energyindustry,butabroadreorientationofsocietyaswemoveintothefuture. Becauseofthehighcostofelectricity,manycountriesinLACareactivelyworkingtoadvance their renewable energy markets. Emergency solar lighting has been installed at Piarco International Airport in Trinidad and the Crown Point airport in Tobago (Bureau, 2009). In Grenada, national electricity provider GrenLec has adopted a 1:1 net metering practice that allowsrenewableenergysystemownerstobefairlycompensatedfortheexcessenergythey produceandreturntothegrid.Asaresult,GrenSol,aleadingsolarcompanyinGrenada,has installedPVsystemsonschools,homes,andcommercialbuildings(Schwerin,2010).Theseare greatsuccessstoriesthatproverenewableenergyisstartingtoemergeasasolution.However, more work is clearly needed to maximize the capital investment, job creation, increased competitiveness, energy security, and clean air benefits associated with the development of vibrantrenewableenergymarkets. ToadvancerenewableenergyinLAC,thepublicsectorshould: Establish mechanisms that reduce the overall or upfront cost of installing renewable energy,including1)thirdpartypowerpurchaseagreements;2)propertyandsalestax exemptions; 3)solar leases; 4) feedin tariffs; 5) national, state, and local rebate programs;6)lowinterestloanprogramsandmicrocreditlending;and7)netmetering andotherincentivestopromoterenewableenergytechnologies. Lead by example and establish committees, energy reduction targets, and renewable energy procurement goals for governments that will challenge the private sector. Example: Trinidads Minister in 2009 appointed members to a Renewable Energy Committee(Singh,2009).

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Establishgoalstoencouragestableandlongtermmarketdevelopment.Thesegoalscan taketheformofanationalcleanenergystandardoraRenewablePortfolioStandard. Assessmarketpotentialandconductresourceinventoryviamapping,andincorporate renewableenergygoalsintocomprehensiveplanning. Promoteprogramsthroughutilityprovidersthatallowresidentsandbusinessownersto purchaserenewableenergyfortheirownconsumption. Ensure thatthe infrastructure is inplace for renewableenergy to grow. This becomes moreimportantaspopulationanddemandforenergyincrease. Workatgainingthetrustandcooperationofutilitieswhileencouragingnonmonopoly businessmodelstoemerge. Ensure that there is competition within the private sector because competition keeps priceslowandraisesthelevelofqualityandservice. Recognizeopportunitiesfortheprivatesectortogetinvolvedandinvitethem. Providenewbusinessand/orrecruitmentincentives. Workwiththeprivatesectortoidentifyrenewableenergyindustryneedsandworkina collaborativeandtransparentwaytowardreducingbarriers. Maintainflexibleimport/exporttradelaws. Carveoutfundinginthebudgetforrenewableenergy.Moneythatissavedthroughthe implementationofenergyefficiencymeasurescanbesetasideforrenewableenergy. Work across jurisdictional and national borders to ensure building and electric codes incorporate solarfriendly provisions and are neither redundant nor working at cross purposes. Ensure that standardized permitting, interconnection, and inspection processes are in place. Regional coordination can increase efficiencies, reduce costs, and facilitate the overallprocess. Create certification/license standards for the installer workforce to ensure quality and safety. Mandate that children receive a balanced energy education that includes renewable energy. Train code officials to understand and be able to work with renewable energy technologies. Encouragepublicaccessofenergyusedata. Create an advisory team or steering committee to launch needs assessment and conductbaselinemetricsdatagatheringandmarketingcampaign. Dedicatestafftoadvancingrenewableenergyprograms.
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Facilitatetheuseofand/orsponsormicrocreditenergylendingprograms. Encouragetheuseofrenewableenergyforemergencypreparedness.Schoolsandother publicmeetingplacesshouldhaverenewableenergyincaseofanaturaldisasterand/or evacuation.

ToadvancerenewableenergyinLAC,theprivatesectorshould: Organizeandestablishindustryassociationstoworktogetheronachievingmutualgoals andholdingthepublicsectoraccountable. Lead by example. Install renewable energy and then promote it and encourage replicationofthoseefforts. Assesstheregionsstrengthensandweaknessesandbuildoffofthem. Find a need and fill it by being entrepreneurial. The private sector is best suited for inventing, selling, and distributing renewable energy products and components. The privatesectorisalsowellsuitedfordevelopingandowningrenewableenergyprojects, producing informational and educational products (either for sale or for free public consumption),andproducingfinancialproducts. ExamplesofinformationalproductsthatcanbecustomizedforLACinclude Centralized database like DSIRE (www.dsireusa.org), which tracks policies and regulations. Centralized database like SolarHub (www.solarhub.com), which is a free referenceguideofsolarequipmentspecifications. Resourceinventorymappinglike3Tier(www.3tier.com). Standardized permitting and business operations software like SolarNexus (www.solarnexus.com), a company whose business model revolves around improvingprocessesforsolarindustrybusinesses. ExamplesoffinancialproductsthatcanbecustomizedforLACinclude Renewable energy cost calculators like PV Watts (http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/). Bank loans like what Summit Credit Union offers residents in Milwaukee, Wisconsin(www.jsonline.com/business/126297198.html). Microcredit energy lending similar to what EarthSpark International and Fonkoze have set up in Haiti (www.earthsparkinternational.org/lending.html), enablingthepurchaseofmoreexpensiveenergysystems.

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Although regional approaches are highly recommended for the creation of codes, standards, and procedures (so that business can more easily flow between countries), it cannot be emphasizedenoughhoweachcountryinLACdeservesindividualizedexamination,evaluation, andrenewableenergymarketcultivation.Thatsaid,therehasneverbeenabettertimetoget started.

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AcronymKey
kW kWh AHJ MW TWh GW LAC DOE RPS REC SREC = = = = = = = = = = = Kilowatt KilowattHour AuthorityHavingJurisdiction Megawatt TerawattHour Gigawatt LatinAmericaandtheCaribbean U.S.DepartmentofEnergy RenewablePortfolioStandard RenewableEnergyCredit SolarRenewableEnergyCredit

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AppendixA.CurrentRenewableEnergyIncentivesinLAC
Sales tax, energy tax, excise tax, or VAT reduction Energyproductionpaymentsortaxcredits

Tradablerenewableenergycertificates

Publicinvestment,loans,orfinancing X X X X X

Capitalsubsidies,grants,rebates

Investmentorothertaxcredits

Argentina Bolivia Brazil Chile Dominican Republic Ecuador ElSalvador Guatemala Mexico Nicaragua Panama Peru Uruguay

X X X X

X X

X X X

O X X X X X X X X X

X X X X X X X X

X X X

W X

O=Statesorprovinceshaveimplementedtheincentive,butitisnotanationalincentive.Source:REN21,2011, page60 W=Incentiveisinprogressofbeingdeveloped/implemented.Source:WorldwatchInstitute Note:Tablemaybeincomplete.

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Publiccompetitivebidding X X X X X

Feedintariffs

Netmetering

RPS

AppendixB.CurrentRenewableEnergyMarketsinLAC
Signed Kyoto Protocol? Hydropower Geothermal Biomass/ Biofuel

Wind

Country AntiguaandBarbuda Argentina Bahamas Barbados Belize Bolivia Brazil Chile Colombia CostaRica Cuba Dominica DominicanRepublic Ecuador ElSalvador FrenchGuiana Grenada Guatemala Guyana Haiti Honduras Jamaica Mexico Nicaragua Panama Paraguay Peru PuertoRico SaintKittsandNevis SaintLucia SaintVincentandtheGrenadines Suriname TrinidadandTobago Uruguay Venezuela

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes

Note:Tablemaybeincomplete. Sources:MeisenandKrumpel,2009;REN21,2011.

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Solar

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