Puerto Rico Solar Project To Power 335,000 Homes

The US Department of Energy Loan Programs Office (LPO) announced the closing of a US$584.5 million (US$559.4 million in principal and US$25.1 million in capitalized interest) loan guarantee to subsidiaries of Convergent Energy and Power Inc. (Convergent), a provider of energy storage solutions in North America. The loan guarantee will finance a solar photovoltaic (PV) system with an integrated battery energy storage system (BESS) and three stand-alone BESS projects across Puerto Rico to rebuild and modernize Puerto Rico’s electric grid. Convergent submitted its loan application to LPO in August 2023.

The solar PV facility would deliver approximately 200,000 MWh of energy annually directly into Puerto Rico’s grid. Stand-alone BESS installations would deliver up to 900 MWh of storage capacity. The systems are expected to enhance Puerto Rico’s grid reliability and stability by adding generation and energy storage capacity near load centers.

According to the LPO, widescale solar and battery storage deployment has been proven to benefit communities across the island by increasing grid reliability and resilience to extreme weather and reducing Puerto Rico’s high energy costs, which, on average, are significantly higher than the US.

The project is expected to result in the avoidance of nearly 2.5 million tonnes of carbon dioxide equivalent emissions on an annual basis by reducing the need to operate fossil fuel-powered generation. This amount is equivalent to the emissions of 335,000 houses’ energy usage per year.

Convergent’s solar-plus-storage installation in the municipality of Coamo would be a 100-MW solar PV system with a 55 MW (55 MWh) BESS. The BESS installations in the municipalities of Caguas (25MW/100MWh), Peñuelas (100MW/400MWh), and Ponce (up to 100MW/400MWh) will have a capacity of up to 225 MW (900 MWh).

According to the LPO, Convergent’s solar PV and battery storage systems can both increase and enable renewable energy generation while playing a vital role in improving energy resilience and affordability. These projects can also help Puerto Rico meet its ambitious clean energy and climate policy goals.

The Puerto Rico Energy Public Policy Act (Act 17) requires Puerto Rico’s utility to cease all coal-fired energy generation by 2028 and shift to a 100% renewable energy mix by 2050. To help Puerto Rico reach 100% clean energy resources by 2050, the solar PV system can generate power directly to Puerto Rico’s grid, and the battery storage system can provide benefits necessary for transmission system resilience.

This project will support approximately 540 construction jobs and around 20 full-time jobs once fully operational. LPO borrowers are required to develop and ultimately implement a comprehensive Community Benefits Plan that ensures meaningful community and labor engagement, improves the well-being of residents and workers, and incorporates strong labor standards during construction, operations, and throughout the life of the loan guarantee. The company is working with its construction partners and local agencies such as the Puerto Rico Department of Economic Development and Commerce (DDEC) to utilize Registered Apprentice Programs. Convergent expects to have apprentice program workers make up at least 15% of total work hours. These programs will be established with most participants originating from communities local to the projects.

This investment supports the Biden-Harris Administration’s Justice40 Initiative, which set a goal that 40% of the overall benefits of certain federal investment in climate, clean energy, and other areas flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.

The financing for this project is offered through the Energy Infrastructure Reinvestment (EIR) program under Title 17 Clean Energy Financing (Section 1706). Established by President Biden’s Inflation Reduction Act, EIR can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or that enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions. In support of President Biden’s efforts to support economic revitalization in energy communities, this project will assist in the replacement of coal energy infrastructure with clean energy facilities to create new job opportunities while lowering harmful emissions.

The announcement is the latest in a string of actions DOE and the Biden Administration took to strengthen Puerto Rico’s grid modernization and energy resiliency. In December 2022, President Biden authorized US$1 billion for the establishment of the Puerto Rico Energy Resilience Fund (PR-ERF), which is administered by DOE’s Grid Deployment Office. The PR-ERF is a separate federal funding source to drive key investments in renewable and resilient energy infrastructure in Puerto Rico. Across all LPO’s programs, DOE has attracted 182 applications for projects across the country totaling over US$278.9 billion in requested loans and loan guarantees, as of December 2024.