CORE rates for solar are fair to all, says CUC

| 15/03/2023 | 53 Comments
Cayman News Service
Solar panels on the Tomlinson Furniture Building (Photo courtesy of Affordable Solar Cayman)

(CNS): Grand Cayman’s power provider has said it will not increase the rates it currently pays for solar energy generated by customers in its CORE programme. Responding to a statement by the Cayman Renewable Energy Association, CUC said it is not against rooftop consumer solar but it “does not support paying inflated prices for energy” from those rooftop producers and passing the costs onto its wider customers.

It argued that the present CORE rate of 15 cents per kWh for 5-10 kWh systems and 17.5 cents per kWh for 5 kWh and under provides a reasonable return.

In its statement, CREA said that CUC was creating the demand for CORE by controlling the access to the CORE capacity with limited, sporadic releases and then claiming that demand justified paying consumers lower rates than the true value of their solar energy.

But CUC claims it would “always make the case for solar rates that are beneficial to all parties: the installers, the purchaser of a rooftop solar system, electricity bill payers, and the general public”.

Responding to some of the points raised by CREA, CUC said that it was not the company’s intention to “participate in a public war of words” with the association but they wanted to “set the record straight where there has been a misrepresentation of the intentions and actions of” CUC.

The power company contends that the size of the rooftop solar market is constrained by grid stability and cost parameters and that OfReg has not challenged CUC’s approach.

“As the owner and operator of the grid under Licence, CUC has an obligation to ensure safe, reliable and affordable energy for all consumers. The company also argues that the estimated cost of electricity from a utility scale solar plant is in the 10 to 11 cents range per kWh, which is why it continues to advocate for more utility-scale renewable energy on the grid as it will bring positive benefits if planned and implemented properly.

“CUC is therefore keen to participate in the utility scale competitive bid process to be conducted by OfReg and hope that it will soon be released,” the release stated. CUC said it is a supporter and facilitator of renewable energy on the grid and is not a competitor to CREA or the solar installation businesses in the association.

According to CREA, CUC knows its current rates are not commensurate with the value consumers should be getting for their solar because the Value of Solar study, commissioned by OfReg and recently completed, quantifies what is and is not a subsidy.

“Predictably, CUC does not support the rate findings of this independent study, which is yet to be released to the public,” CREA said. “If CUC truly has the country’s best interest at heart over a desire to further their interests, they should explore every option to encourage competitive private sector-led installation and financing of renewable energy systems on residential and commercial properties.”

That includes supporting attractive rates of purchase to encourage solar installations in line with this study and the introduction of off-peak energy charges, CREA stated. It also called on CUC to remove the barriers to full capacity of consumer solar PV and other renewables.

CNS has contacted OfReg to request a copy of the completed Value of Solar study and we are awaiting a response.

See CUC’s statement below:


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Category: Business, Energy, Science & Nature, utilities

Comments (53)

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  1. Richard says:

    If I built a house, it would have a solar roof capable of producing all the electricity I need to be self-sufficient. My system would include enough lithium batteries to store the surplus I produce. I would sever all ties with CUC. At the price that CUC charges for electricity, my break-even point would be a lot sooner that CUC would have us believe. It would cost more upfront to do that but Ahh, the pleasure of independence!

  2. Anonymous says:

    “does not support paying inflated prices for energy” – oh the irony in this statement

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  3. Anonymous says:

    Look how they treated one their own employee from the explosion back in 2011, the human Kurt Scott they just kick him to the curve. The CEO owns the McDonald’s food restaurant right parkers and in town when hurricane Ivan hit and the island was recovering his restaurant by parkers was the first place to receive electricity power while everybody on island had to suffer, that goes to show. Adding to that Caribbean Utility Company Limited is 60% owned by Fortis Inc Canada which own the majority share of the company and has it as one of it under its company’s Fortis Bermuda umbrella as on of its subsidiary company.

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  4. Anonymous says:

    We live in the Caribbean with plentiful sunshine and yet we generate almost none of our electricity from Solar power. Why? Because the incumbent monopoly CUC has played every trick in the book to slow down and in many cases stop solar installations.
    It is honestly disgusting that when we are facing a climate crisis we are being told we have to use diesel to generate 98% of our electricity.
    The ONLY real solution now is to split CUC into 2 parts. The grid part and then the generation part. This is the only way we can create real competition and move to a greener approach to electricity generation. Solar is way cheaper than generating electricity by diesel but CUC is actively stopping this.

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  5. Anonymous says:

    I ran into someone from CUC and asked them why they have not installed Solar yet. They said they have been requesting OffReg to run the bid for everyone to compete for more than 4 years and OffReg is just sitting on their a**. The person also mentioned that they do not have a generation license, only for poles and lines. This would not be a conversation if OffReg just did their job. OffReg came out and said they were going to do one last year and here we are… a year later… OffReg has done nothing. Big surprise!

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  6. Anonymous says:

    An essential service such as electricity generation should not be in the hands of a for-profit company.
    The government here could not handle it for sure as they suck at almost everything they do but a non-profit company would be applicable.

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    • Anonymous says:

      “The government here could not handle it for sure as they suck at almost everything they do”

      To be fair, a gallon of water in plastic at foster’s is about 2-3 bucks I think?

      Tap water, perfectly drinkable, is about 2-3 cents per gallon.

      Give Water Authority some credit.. that’s quite a cheap essential service even with an average monthly bill of $60 – $2 a day, or one single gallon from the store.

    • Anonymous says:

      The infrastructure of a country like electricity, water and telecoms requires a lot of expertise to operate and maintain. It is not something to be played with by persons who have no real expertise other than ideas and a good sales talk. National essential assets are relied upon by the whole economy for public order, health, safety and business.

      CUC’s shareholders include a lot of ordinary Caymanians plus their Caymanian staff, whose dividends and salaries are reinvested locally. If Cable & Wireless had offered shares to their staff and the public, we would not have the situation where FLOW’s service is now in question and instead of money being kept in the local economy due to the multiplier effect, one of their main competitors is having financial woes placing that sector at risk.

      Don’t expect this to change anytime soon. Let us be very careful playing with a sector that works well and could perhaps do with some tweaking, but don’t throw out the baby with the bath water, and keep the good ship Cayman on an even keel and steady as she goes.

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  7. Kman Genius says:

    Did CUC just made a statement saying it provides “AFFORDABLE” energy to its consumers? Surely ironic how the company doesnt want to pay “inflatable” rates.

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  8. Anonymous says:

    The rate is fair to all, says the monopolist sitting on his mountain of profit.

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  9. Anonymous says:

    Unfortunately with Offreg being the most useless institution Government has created (pretty sure so they can divert attention from themselfs) CUC and other entities that offreg is supposed to look into for the betterment of everyone in cayman ,have no need to do so this and previous Governments elected officials are to afraid to crooked etc to protect their shares and financial gain In order to create any valuable change for the average Caymanian consumer …..PACT just as much to blame as PPM .
    Liars crooks and thief’s in power……

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  10. Anonymous says:

    CUC is using MY LAND free of charge to have it’s light pole stationed to provide electricity to other customers.

    I asked them to remove the pole when they were upgrading the area, which was ignored, even though there was a public access road to those customers for them to meet the request.

    As a result, other service providers (Logic, Degicel) use the poles position on my property to provide paid services to other customers.

    I pay for CUC service. How are they allowed to use my land free to provide power to other customers. This pole does not supply my property with power and is located 10 ft behind my fence.

    OfReg do your JOB!

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  11. Anonymous says:

    What does it cost CUC to produce one KwH via the diesel generators?

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    • Anonymous says:

      Check your latest bill. It should be something less than what you are being charged for one Kwh.

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    • Anonymous says:

      They will get around 18.5 kWh for 1 gallon of diesel, so approx 28c per kWh, probably less with concessions.

      My bill works out at 39.7c per kWh, so the profit is not much.
      CUC are up to their neck in debt due to huge capital expenditure in the last 20 years, so don’t think that they are minting cash. Those who are minting are the ones who loaned them the money. Follow that trail of cash and it will lead you right back to Cayman.

      The share price has not even kept up with inflation. The customer share scheme is a con because the holders only get the leftovers.

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  12. Anonymous says:

    The fact that we are arguing about the rates means the real people have already lost. How about I put solar panels on my house to power my own house and CUC doesn’t cut me off the grid. When I need energy over what I can produce I will buy from the grid. But CUC will not allow themselves to be a supplemental power supply. This is the only way Cayman is going to meet any kind of renewables targets but no one will talk this game because it’s too drastic and not enough profit motive. Get real folks!

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    • Realist says:

      What is to stop people installing solar panels, and primarily using that energy, drawing only from CUC when their solar panels aren’t generating (eg at night)?

      E.g. Are the reasons technical (installation too electronically complex), regulatory (banned by CUC) or commercial (P&L doesn’t business case)?

  13. James says:

    Couple of important points for context on this issue.

    * CUC and some within OfReg argue that the financial payback on your systems here in Cayman should be 13 years and more. The average payback on solar system in North America is 7.2 years. CUC and OfReg thus believe that Caymans consumers should be compensated at half the rate of those in the United States. Would you buy solar if you “only got your money back” (haven’t yet made a profit) in 13 years? Of course most people would not but CUC and OFReg say yes this is reasonable.

    * The rates they pay and the returns they say are reasonable for Cayman’s consumers also do not factor in the costs of financing, over 90% of locals need financing to afford renewable energy systems. So paying you a 15c rate to make a 7-8% return only to lose most of that to financing costs puts the consumer at very little return at all. CUC by contrast makes their net returns AFTER all their financing costs. So they’re selling the idea that the average Cayman consumer deserves a rate of return that is even less than their own rate of return for a giant monopoly utility with guaranteed returns and an exclusive non compete contract.

    * The rates CUC and OFReg propose you get paid for the solar you produce do not account for the ‘value’ your solar provides (A green Industry — Jobs, Economic Growth, Using existing rooftops instead of cutting down raw land for solar farms less than needed, etc. etc.) that is what the Value of Solar study quantified and what CUC and someone within OfReg are fighting against.

    * Note also that the due to the current economic climate solar costs today are on par with the costs back in 2017 (See NREL 2022 report), when the rates were double what they are today and CUC and OfReg were promoting that as a fair rate with a fair return for consumers.

    * The rates CUC and OfReg said are appropriate and fair for years now coincided with the falling costs of solar over time and providing a reasonable return all in an effort to attain renewables without subsidies. CREA agreed/agrees with that strategy but that strategy has no fundamentally changed. Those fair rates as described by CUC and OfReg as late as 2020 were 28c KWh and 24c KWh (26c kWh average) just 2.5 years ago. In 2020 they suddenly decided it was appropriate to diverge from a decade of decision making and now cut your solar rates at almost have the value overnight.

    * The other unspoken reality is that rooftop solar can be done at less than the cost of diesel (currently around 20c Kwh) and CUC and OfReg have for years resisted programs and changes that would add greater scale to rooftop solar to do exactly that. So the very entities complaining about costs are the ones ensuring the economies of scale can’t bring down those costs.

    * The responsibility to upgrade the grid and thus carry out timely capacity planning falls on OfReg and CUC and they have failed to do so for many years in a way that lets consumers continue to adopt solar energy but they then use their own failure to do so as an excuse as to what you (cayman consumers) simply can’t have more of it. The context being Cayman sits at 3% renewable energy penetration where other countries/islands are 5-10X that already using all the same technologies available to us. So understand that the ‘grid stability’ issue while a valid issue for high penetrations of renewables is a result of their planning and deployment not of any limitation of the grid or technology available.

    The bottom line is we have paid lots of tax payer money to get experts to carry out a study that the utility and some within the regulator do not want to accept because it does against their strategy of paying consumers the lowest rate they feel they can squeeze out of you instead of what your solar is worth EVEN IF that value is less than the cost of dirty diesel fuel and has no subsidies to consumers at all. The fact that stopping the proliferation of rooftop solar means avoiding lots of stronger solar companies in the market who will compete with CUC for the provision of solar, large and small, going forward is certainly a big bonus to the utility.

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    • SMH says:

      That’s a very long winded argument to justify increasing rates paid for electricity so that you can sell your products to more people while the rest of us are paying those higher rates. Brilliant!

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    • Anonymous says:

      You are blinded by your own argument. The only thing in your eyes/mind is “rate of return”, which in turn leads to how much money will flow into your pocket.

      Has anyone ever thought about installing solar because it is the right thing to do? Use what you generate and share the excess with your neighbours? I didn’t think so.

      Has anyone ever installed a WiFi mesh network with extenders in their house with the belief that their internet service will be free after 10 years?

      Has anyone every installed a whole-house charcoal filter on their incoming water supply with the belief that after 15 years they will no longer receive water bills?

      Has anyone every installed a low-flush toilet with the belief that after 10 years they will no longer receive a sewer bill?

      Has anyone every purchased a highly efficient gas stove with the belief that propane will become free after 20 years?

      You are trying to sell solar on the basis that anyone can generate electricity with solar, and after recovering the large sum of money they paid you for installation and commissioning, they have a free income-generating business for the rest of their lives.

      What you are selling is called a Ponzi scheme, where everybody gets rich and nobody has to pay. To try and keep the money coming in you try the old smoke and mirrors trick of blaming CUC and OfReg.

      Solar certainly is viable in Cayman, but it has to be on a large scale. Anyone purchasing solar in the belief that they will have free electricity after “X” years, and residual income from it in their retirement years will most likely fall for other scams.

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      • Anonymous says:

        Don’t you just love it when employees of the monopoly utility who by law competes with absolutely nobody, then lectures others who do have to compete in a free market for being greedy and seeking profit? Irony is always lost on CUC career employees isn’t it.

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      • Gavin says:

        No one (I think) is claiming that after X years they should get free electricity. It’s more like: if you can rent a car for $25,000/year, but you can buy the same car for $50,000, then after 2 years you have a “free” car. You are saving money that you would have had to keep paying to the car company/CUC.

  14. Anonymous says:

    If CUC thinks paying more than 17 cents a kilowatt hour is paying an inflated price for energy, how do they think I feel when I get their bill each month! Or put it another way, why doesn’t CUC just charge us 17 cents if they think that’s a fair price?

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    • Anonymous says:

      You know we pay that 17¢, right? And if it were more, that we would pay the difference. You might be happy to pay more but I’m not.

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      • Anonymous says:

        Except that’s not the way it works. The price CUC charges you is regulated- if they were to pay more for solar, incidentally less than they are paying to generate from diesel, it would affect their profit margin, not the cost to the consumer.

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        • Anonymous says:

          The solar and the diesel are passed through to us by the terms of their license with zero mark up, at the cost paid. There is zero profit impact either way.

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    • Anon345 says:

      CUC are saying they are paying an inflated price at 15-17c kwh for solar but are happy to sell us electricity that costs 37c kwh, 24c kwh of which is the diesel cost to produce it. Last time I checked 17c is less than 24c.

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    • Anonymous says:

      OfReg needs to cap CUC’s margin on solar generated energy. The problem is, CUC wants a larger profit margin for the sale of Solar generated energy. If they have to pay more, they will pass the cost on to the consumer to keep their margin the same. It’s just greed.

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      • Anonymous says:

        CUC’s margin on solar from these CORE customers is 0%. They buy it, then sell it to you and me at the exact same price.

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  15. Anonymous says:

    So CREA wants higher rates for rooftop solar….. and CUC wants solar at lower rates. Seems like that’s what it all boils down to. No wonder CREA is upset. But who has to pay these rates?

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  16. Anonymous says:

    CUC only care about profits or they would be using solar to power our grid on the 90% of days the sun is shining.

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  17. Anonymous says:

    Why is everyone hatting on CUC, by far the best Power company in the Caribbean.

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    • Anonymous says:

      Nicely said by a shareholder.

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    • Anonymous says:

      Agreed, just let them take care of it and everything will work out great!

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    • Anonymous says:

      Thanks, CEO or shareholder who makes profits off of a dying industry that could possibly take humanity with it.

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      • Anonymous says:

        we all have the choice to live in darkness and heat

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        • Anonymous says:

          That’s kind of the point…the fact that we only have the options of [Pay exorbitant prices for dirty energy] and [Live in darkness and heat]. Despite having access to a feasible solution of consumer-generated solar power + transfer switch + grid as backup, there are no available fair choices between the spectrum of the two options.

  18. Anonymous says:

    Q. Who are we all paying to be in charge of grid stability while scaling up energy transition to meet agreed sustainability targets?
    A. CUC. That’s who. Nobody else.

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  19. Anonymous says:

    “Fair to all, says CUC”, as if they are the government, and/or a party where they’re commercial profit interests to gouge consumers and inhibit adoption can be justified by their dividend targets. This statement is confirmation that the greater public interest is secondary, and the relationship with monopolist utility is broken. Enabled by a regime all over the map.

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    • Anonymous says:

      They are the government so just shut up cry baby!

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      • Anonymous says:

        Yes but Cayman is not [supposed to be] under dictatorship so put your dummy back in your own mouth.

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      • Hubert says:

        Well it is true that nearly every member of the Cabinet and elected sitting member gets a good return on their CUC shares every year.

        That is precisely the reason why they all have a conflict of interest and this interest should be publically declared.

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      • Anonymous says:

        Except they are not the government numbnuts – they are a listed company, intended to make profit. Which is why we supposedly have a regulator to control their pricing – yeah, I know.

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    • Anonymous says:

      Who else should it be fair to?

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