The world already knows that the future is in solar energy.
The math is simple – one-time solar panel installation project leads to decades of energy savings. For almost 60 different countries around the world, solar energy is the cheapest form of energy available, according to Bloomberg New Energy Finance data.
That paints an impressive picture for our partners and clients in the Dominican Republic. Solar energy has long surpassed coal and other fossil fuels as the most profitable power source available – now it is up to business owners with high energy usage to benefit from investment.
Read on to learn more about how solar energy can save your business money, and why this little-explored energy source will soon be one of the country’s most robust.
Only a handful of Dominican business owners have yet invested in their own solar panels – you can see them lining hotel resort rooftops in cities like Santo Domingo and Monte Cristi.
As panels become more commonplace, this money-saving trend will become a competitive need that your organization will need to address.
The Trend: Weaning Off Fossil Fuels in Favor of Solar Power
To truly understand that value solar power offers Dominican businesses, we must start with an overview of Dominican energy usage and sources.
As of early 2017, 88 percent of the Dominican Republic’s energy consumption comes from imported oil products, natural gas, or coal. The Dominican Republic, in partnership with the International Renewable Energy Agency (IRENA) researched a scenario where it cuts that number down to at least 75 percent by the year 2025.
Electricity accounts for 24% of energy usage in the Dominican Republic, yet solar panels generate only 0.1% of that amount.
Oil and natural gas are the clear winners at the moment – but they cannot remain so for long.
Hydrocarbon products cost more than solar energy does in the long-term – especially when shipped in from other countries. Solar prices are approaching $1.65 million per megawatt.
Coal, on the other hand, stands at around $3 million per megawatt. It is easy to see why the Dominican Republic wants to maximize its solar power gathering capability.
As a business owner in the Dominican Republic, you too can benefit from this trend. Consider that solar pholtovaic (Pv) panels can drop electricity prices well below the current Dominican average of $0.19 per kilowatt-hour.
In some cases, the price may drop as low as $0.04 per kilowatt-hour – that’s a 79% price cut.
Why Not Let the Government Make the Switch?
So far, you may be thinking that implementing solar power is a great idea, but not necessarily something you need to invest in personally.
After all, the Dominican government offers electricity subsidies to most Dominican citizens – why not let the government handle the installation and integration of solar energy for its citizens?
Even if we don’t take the powerful politics of oil lobbying into consideration, another important fact presents itself – Dominican power infrastructure has an average transmission loss rate of 32%, according to WorldWatch.
That suggests that if the government were to convert to 100% renewable energy tomorrow, almost one-third of the electricity produced would dissipate before you had a chance to use it.
The government of the Dominican Republic knows this, and has passed a law that rewards electricity producers with a one-time tax credit of up to 40% the investment price. As further incentive, you can earn a 100% exemption on sales tax for buying goods and services for the generation of clean energy – this applies to solar panels, inverters, and batteries.
Moreover, since 2011, residential and commercial owners of solar installations benefit from net metering. Under net metering policy, grid-connected solar panel owners receive energy credits for excess power exported to the local electric grid.
However, only 59 customers had connected renewable energy installations to the grid as of 2015 – the time to take advantage of this opportunity is now.
Make Your Own Electricity to Protect Against Rising Electricity Costs
The best way to hedge your bets against damaged infrastructure and rising electricity costs is to make your own electricity. With one of the sunniest climates on the planet, Dominican business owners are uniquely positioned to benefit from installing photovoltaic cells.
Most of the Dominican Republic features a very high average global horizontal irradiance (GHI) measurement. This is the most important measurement for predicting the electricity production potential of solar panels.
For comparison, Germany – which has nearly half of the world’s installed solar power capacity has an average GHI of about three kilowatt-hours per square meter.
Most cities in the Dominican Republic can generate between five and seven kilowatt-hours per square meter. With a potentially high ROI, Dominican business owners are well-positioned to enjoy the money-saving benefits of solar power.
Below, we’ll find out just how much you can expect to save.
How Much Energy Do Dominican Businesses Use?
To better quantify the cost-savings solar power offers Dominican business owners, we need to look at the average power expenditure of the biggest sectors in the Dominican economy.
Contributing more than half of the country’s annual GDP, tourism is the most important sector of the Dominican economy. It is also an industry with major potential to benefit from solar energy savings. The Caribbean Hotel Energy Efficiency Action Program (CHENACT) offers a deep and well-researched look at energy use in the tourism sector.
Since hotels and resorts dominate the tourism industry, addressing their energy needs first and foremost ensures the greatest impact on the Dominican economy overall.
CHENACT separated hotels and resorts into size categories based on the number of guest rooms – as the chart above shows, air conditioning is the primary power draw for most Caribbean hotels.
At a certain threshold, air conditioning makes up more than half of the average hotel’s electricity usage. Importantly, guests’ usage of air conditioning hits its peak during the hottest part of the day – when the midday sun is shining. By capturing the sun’s energy and using it to power expensive air conditioning systems, medium-to-large hotel owners can save enormous sums of money every year.
CHENACT calculates that the average 200+ guest room hotel can save almost $400,000 per year by implementing its Energy Efficiency Action plan, which incorporates, among other things, a comprehensive solar energy plan.
The organization further calculates that hotels with less than 50 rooms can save an average of $35,500 per year by enacting the same plan – this is important because small hotels use more electricity per-guest than large ones. Very small hotels tend pay more for heating water than for air conditioning.
This gives small hotel owners a unique incentive to go solar: Solar water heaters can cut down energy costs significantly, and are much less expensive than grid-tied electricity-generating solar panels. By incorporating both, small hotels can operate at levels of energy efficiency competitive with their larger neighbors.
The Dominican Republic is a large scale producer and exporter of tobacco products, beverages, and agricultural products. It has a well-developed industrial sector that refines the many different raw materials found on the island of Hispaniola. Both small- and large-scale businesses can earn significant savings by generating their own electricity.
According to Export.gov, some of the most promising industries for solar investment include military facilities, airports, malls, and medium-to-large companies that occupy office buildings in the country’s largest cities. Solar power benefits both small and large industries alike. This can be illustrated with a staple of Dominican commerce – sugar.
Next to Cuba, the Dominican Republic is the Caribbean’s second-largest producer of sugarcane. Public and private sugar mills produced almost 4 million metric tons of sugar in the 2015-2016 harvest year, accounting for nearly $100 million in exports.
Solar energy is uniquely suited to meeting the energy needs of agricultural refinery – from sugar refinery to the refinery of cash crops such as tobacco and food crops. According to Fundación Cartif, solar energy offers a range of advantages to high energy-consumption industrial processes such as sugar refinery:
• Production plants offer a large rooftop surface area for solar panel placement.
• Production plants generally earn rates of return on the order of two or three years – much shorter than the 25+ year lifespan of the average solar panel.
• Production plants consume electricity for a wide variety of purposes, offering multiple entry points for solar energy implementation.
While implementations of this sort are not yet common in the Dominican Republic, international efforts to integrate solar energy with sugar production and refinement have led to annual rates of return as high as 9.1% compared to coal, in particular when applied to the sugar drying process.
Similar efficiencies for the large tobacco, rum, coffee, or cocoa sectors can easily yield similar results. Any small- or large-scale industry in the country can significantly reduce its municipal power consumption by generating its own electricity using solar power.
5 Reasons to Become a Solar Powered Business Today
As fossil fuels get more expensive in coming years, as expected by IRENA, Dominican industries will find it increasingly difficult to pay.
Fuel imports currently represent between 5 and 20 percent of the Caribbean nation’s GDP – and large business owners are the ones paying the brunt of the cost.
All of this information points to one fact – there has never been a better time to incorporate solar panel systems into your grid. You can start using electricity – and money – more efficiently simply by letting the sun generate your power.
Any business in an energy-intensive industry can save significant amounts of money by incorporating solar power into their grid. The larger your company’s power draw is, the greater savings you can afford as a result.
1. Solar Pays for Itself – Then Produces Profits
By far the easiest way to benefit from solar power is to borrow out of the savings that you’ll earn after solar energy starts replacing expensive fossil fuel energy on your monthly electricity bill.
Large businesses can often make back their initial investment in less than a decade. Most businesses make back their initial investment within four to eight years, depending on local electricity rates, the size of the solar project, and the specific type of mounting structure used to house solar panels.
These savings continue for up to 25 years after the fact – robust solar panel technologies can last even longer than that with minimal maintenance.
2. Small Businesses Can Offset Costs
Small businesses can also benefit greatly from solar panel installation.
The fact that panels last for decades and need almost no maintenance makes them the ideal long-term investment for business owners looking to cut costs and increase business efficiency.
3. Large Businesses Have Even More to Gain
As you might expect, the larger a surface area you can dedicate to solar power generation, the more you will save on a monthly basis. Solar power definitely benefits large company buildings with extensive rooftop areas.
Among global brands, Target and Walmart are already leaders at using solar energy to save money.
4. Decrease Energy Reliance
What happens if the global price of imported oil skyrockets? Businesses in the Dominican Republic will have to foot the bill. Solar energy reduces Dominican dependence of foreign energy, and continues to do so for decades.
5. Increase Property Value
Thinking of taking out a loan on your business real estate? Solar panels increase property value and lead to higher appraisals, increasing the potential lines of credit your business can enjoy for years down the road.
Solar Power Case Studies
Many companies are already using solar power to cut their electric consumption costs and boost profits. The following are real-world examples using IRENA’s facts and data:
1. Heritage Paper, California
Located in the city of Livermore, Heritage Paper is a large scale industrial manufacturer of packaging products.
This company outfitted its two largest facilities – a 130,000 square foot manufacturing facility and a 150,000 square foot distribution facility – with a powerful 528 kW solar panel system.
Not only did the company manage to put zero money down on its system – leveraging cost savings of almost $27,000 per year over the decades-long lifetime use of the panels – but it reduced CO2 production by 26 million pounds in the process. The company effectively financed its own solar project using projected savings.
2. GAL Manufacturing, New York City
GAL Manufacturing is a large-scale industrial concern located next to Yankee Stadium in the Bronx, New York City.
It is also home to one of the city’s largest solar panel arrays, which not only saves the company a huge amount of money every year, but also reduces its facility’s lifetime CO2 production by 2.7 million pounds. This elevator manufacturer installed a 237 kW system comprised of 988 individual solar panels.
The largest size of this panel array is responsible for saving the company $50,000 per year in electricity costs. The finished solar energy system generates enough power to cover approximately half of the facility’s regular electricity usage.
3. Bardessono Hotel, California
The Bardessono Hotel is one of the greenest, most energy efficient hotels in the world. From the very beginning, this 62-room hotel was designed to meet the most stringent renewable energy certification in the world, LEED platinum.
In this case, the presence of a rooftop infinity pool thwarted any traditional attempt at solar panel installation on the hotel’s main building. Nevertheless, by focusing on its various outlying condos and detached villas, solar contractors were still able to add an astounding 940 individual photovoltaic panels.
This solar installation provides enough electricity to cover 26.37% of the hotel’s daily operating energy costs.
The Time for Solar Energy Investment is Now
Fossil fuels are the past and renewable solar energy is the future. Fossil fuels will continue to become more expensive – and with them the average monthly electricity bill for Dominicans and people around the world – while solar energy will only get cheaper. The Dominican government is doing its part to achieve energy independence. This can be seen in the construction of the Caribbean’s largest solar array taking place in Monte Plata.
In turn, Dominican business owners have every incentive to become a part of the solar revolution. Earning cheaper, cleaner electricity for yourself and your business starts with a single consultation with our solar energy experts.