Novel Solar Program Supports Resilience in U.S. Virgin Islands

Key Takeaways:

• The U.S. Virgin Islands Energy Office (VIEO) recently launched the Solar+ Financing Pilot Program to help residents in the territory access and afford battery storage and solar panels.

• The program allows customers to repay the costs of installing solar panels and battery storage devices through their utility bills. This is the first time this method, known as on-bill financing, is administered by a U.S. territory or state energy office.

• Currently, VIEO is working with 80 homeowners in the short term and 120 in the long term to finance solar arrays and batteries for their homes so they can meet their electricity needs sustainably and have backup power during a power outage event.

The U.S. Virgin Islands Energy Office (VIEO), in partnership with the U.S. Virgin Islands Economic Development Authority and with assistance from EESI, recently launched the Solar+ Financing Pilot Program to help residents in the territory access and afford battery storage and solar panels. In December 2024, the first two loans, totaling $50,000, were closed for the no-money-down and low-interest residential clean energy program. [1]

The Solar+ Financing Pilot Program, which has enjoyed support from the territory’s governor, is specifically designed to lower barriers to financing for clean energy upgrades. The program aims to enhance resilience and reduce energy costs. When the program first opened in 2022, it received 360 applications within a 30-day window. Currently, VIEO is collaborating with 80 homeowners in the short term and 120 in the long term to finance solar arrays and batteries for their homes. The program aims to install 20 solar arrays and battery projects by June 1, the start of hurricane season, with the remaining 60 installed by the end of the year.

The Solar+ Financing Pilot is an innovative financing program that allows customers to repay the costs of installing solar panels and battery storage devices through their utility bills. This is the first time this method, known as on-bill financing, is administered by a U.S. territory or state energy office.

Despite having abundant solar resources, the U.S. Virgin Islands (USVI) are primarily powered by burning fuel oil and propane, which are polluting and harmful fossil fuels. Only 2% of the electricity consumed in the territory comes from solar energy. Since there is no local production of petroleum and propane, they must be imported, which drives up electricity prices. USVI residents and businesses face the highest energy costs in the United States, paying an average of 33 cents per kilowatt-hour (kWh), about two times the U.S. average of 16 cents per kWh. These steep energy costs result in significant energy burdens for residents, as electricity expenses constitute a substantial portion of a family’s budget.

Due to their location more than 1,100 miles south of Miami, the U.S. Virgin Islands have no power lines connected to the mainland. All fuels must be imported by ship. The islands are also vulnerable to hurricanes that threaten their energy and housing infrastructure. Following the impacts of Hurricanes Maria and Irma in 2017, much of the territory’s distribution and transmission infrastructure and many residential structures were destroyed.

Increasing Resilience and Reducing Energy Burdens

Modeled after Hawaii’s successful Green Energy Money $aver (GEM$) on-bill program, which EESI also helped launch, the Solar+ Finance Pilot Program finances projects for terms of up to 15 years with a maximum loan of $30,000. Property owners repay the costs of the renewable energy systems over time through their monthly utility bills with no upfront fees.

Residents participating in the program typically submit requests to finance a 5 kilowatt (kW) solar system and 13 kWh of battery storage. A 13 kWh battery can continuously discharge 1 kW for 13 hours. Combining batteries with solar panels offers participants a reliable backup power source during electricity outages caused by extreme weather events, like hurricanes, which are frequent in the region. A fully-charged 13 kWh battery can power a typical home for up to 16 hours, depending on electricity consumption from the appliances in use. For instance, running an air conditioner will quickly drain the battery, but powering a 200W refrigerator and 20W lights is less taxing. Then during daylight hours, the solar panels can power the house and recharge the batteries again.

By installing solar panels and battery storage devices, residents purchase less electricity from the power grid, which is 98% fossil-fuel-based, and instead generate their energy from abundant solar resources. Participants in the pilot program save on their high utility bills and then use those savings to pay off their loans, while also contributing to the increase of renewable energy use on the islands. Grid-connected batteries store renewable energy during the day and release it to the grid when needed, primarily between 7 and 10 p.m.

When using solar-generated electricity to power their appliances, program participants are saving money because they are not paying 33 cents per kWh for grid-provided electricity. During night hours, they can choose to draw energy from the grid or from their battery storage, which leads to more savings. Additionally, program participants can sell excess energy back to the grid when they are not home or not using their appliances, receiving a credit of 12.3 cents per kWh through the Net Energy Billing Program. This represents an extra revenue stream that can help pay off the installation loans.

A rooftop solar installation underway in the U.S. Virgin Islands. Courtesy: Virgin Islands Energy Office.

Program Launch

In December 2024, the U.S. Virgin Islands Energy Office, in partnership with the U.S. Virgin Islands Economic Development Authority (VIEDA), issued the first two pilot program checks to approved applicants for 50% of the costs of their renewable energy systems. Loans are processed in two disbursements: first, when homeowners are approved, and second, once the solar array and battery storage are installed and connected to the grid. Payments are made through two-party checks that the customer signs over to the contractor. After receiving approval from VIEDA, participants can hire contractors to begin the installation and interconnection process. The entire process takes three to four months. As the approval process becomes more efficient, the program aims to close 10-15 loans per month.

The Virgin Islands Water and Power Authority (WAPA), the territory’s municipal power utility, is also a partner in the Solar+ Financing Pilot Program. It helps participants interconnect their renewable energy projects to the grid and inserts the repayment charge as a line item on their monthly utility bills.

Capital for the program comes from the U.S. Virgin Islands Economic Development Authority, but the Energy Office is in charge of reviewing applications and notifying the lending partners about which applications are moving forward.

VIEO combed through its 360 initially-approved applications and selected 200 applications for conditional approval. The program does not consider credit scores during screening, to avoid unfairly penalizing low-income households. Instead, VIEO reviewed the utility bill payments of all 360 applicants for the prior 12 months, along with their disconnections over the previous 3 years. Applicants were approved for the program if they made their electric bill payments on time, had no disconnections, and if the systems they wanted to install could generate enough solar energy to reduce their electricity bill by more than 10%. To participate in the program, homeowners must also provide proof of residency.

Some of the 360 applicants had already installed solar panels between applying and having their applications reviewed, so they were removed from the list.

Ultimately, VIEO reduced the list to 80 applicants who meet their criteria for installations in the short term and another 120 who are conditionally approved for the future. In collaboration with the U.S. Virgin Islands Economic Development Authority, the lending partner, VIEO is finalizing loan documents and assisting applicants in moving forward with installations and repayments.

By financing the installation of solar arrays and battery storage through the pilot program, the territory’s energy office aims to demonstrate that these clean energy technologies can provide reliable backup power to residents when the grid fails due to extreme weather events. To achieve this, the energy office plans to install 40 solar plus battery storage systems by mid-summer, when the hurricane season peaks and the likelihood of a hurricane damaging the islands increases. Collaborating with WAPA, the energy office intends to test these projects under challenging weather conditions.

As these projects are interconnected to the grid, they will form a territory-wide virtual power plant. By managing and aggregating all the power stored within the battery storage devices, VIEO and WAPA can effectively reduce reliance on fossil fuels and increase renewable energy use in the islands, resulting in lower energy costs and increased resilience. Increased solar energy production, with distributed backup battery storage (thanks to initiatives like the Solar+ Financing Pilot Program), will help the U.S. Virgin Islands get one step closer to energy independence.

“Despite the current policy environment, we remain steadfast and committed to deploying affordable clean energy in the U.S. Virgin Islands,” said Kyle Fleming, the director of the United States Virgin Islands Energy Office. “And we look forward to expanding the reach of these programs. The Solar+ Financing Pilot Program is creating a benchmark of how affordable and resilient clean energy is made available to residents in the Virgin Islands. If the program is successful, it will be turned into a full program to increase further energy and monetary savings for the islands’ residents.”

Author: Miguel Yañez-Barnuevo

[1] Based on conversations with Kyle Fleming, United States Virgin Islands Energy Office Director.