How Puerto Rico could call on rooftop solar to avoid blackouts

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Puerto Rico’s troubled electric grid was recently thrust into the national spotlight yet again — not because of an islandwide blackout, but over blistering remarks made by one of the world’s biggest pop stars. Puerto Rican musician Bad Bunny dubbed the grid the ​“worst electric system” and singled out its private operator, Luma Energy, during a concert in San Juan late last month. Only a week later, a major hospital in the capital city lost electricity for at least 16 hours, leaving patients and staff in the dark.

Puerto Rico continues to contend with a fragile electricity system nearly five years after Hurricane Maria battered the U.S. territory and all but destroyed its centralized grid. Despite billions of federal recovery dollars and post-hurricane repairs, residents still endure routine outages, widespread disruptions and soaring electricity rates.

The uncertainty has prompted many of Puerto Rico’s 3.2 million people to take matters into their own hands. Tens of thousands of rooftop solar arrays with backup battery systems operate across the island, allowing households and businesses to run their lights and appliances even when the grid goes down.

Now solar advocates say that there’s a way for the island’s state-run utility to help harness these resilient renewable systems and ease energy woes across the island.

After a series of delays, the Puerto Rico Electric Power Authority (PREPA) seems to be on the cusp of approving plans for the island’s first virtual power plant, potentially within the next month or so, according to local experts.

A virtual power plant (VPP) is a sprawling network of solar-and-battery systems that are remotely connected and controlled using software and digital communications networks. The idea is to use these many individual installations to help reduce power interruptions and fluctuations on the main electric grid that serves the wider population.

PREPA produces and procures the island’s electricity supply. (Luma Energy, the target of Bad Bunny’s scorn, operates the transmission and distribution system.) In February 2021, PREPA solicited proposals for 150 megawatts’ worth of virtual power plants as part of a larger solicitation for renewable energy and battery storage projects. Since then, the process has moved forward in fits and starts.

“Puerto Rico has this existing, constantly growing [energy] resource that could help prevent blackouts for everyone,” said Javier Rúa-Jovet, a leading proponent of VPPs and the chief policy officer for the Solar and Energy Storage Association of Puerto Rico, an industry group. ​“What we’re saying is to tap into that untapped resource.”

Transforming Puerto Rico’s grassroots solar surge

Virtual power plants are quickly catching on in the United States and worldwide as utilities grapple with stressed-out grids, and as the costs of clean energy technologies come down over time.

Broadly speaking, a VPP operator can direct individual power systems to simultaneously feed electricity directly to the grid whenever power is needed, such as during periods of high power demand. Ideally, by using lots of small systems right where people use electricity, utilities can offset or postpone the need to build large, monolithic power plants and long high-voltage transmission lines.

In California, energy companies are deploying solar-and-battery VPPs to help prevent rolling blackouts in a state wracked by intensifying wildfires, extreme heat and drought. In Australia, Tesla is working with regional governments to install solar arrays and Powerwalls on tens of thousands of homes for VPP programs. The startup AutoGrid, which makes VPP software, says it operates over 5,000 megawatts’ worth of projects in a dozen countries.

Puerto Rico’s own VPP efforts began in the wake of Hurricane Maria — and it builds on the grassroots surge in rooftop solar projects.

Maria slammed into Puerto Rico on Sept. 20, 2017, causing thousands of deaths and leaving residents without electricity for weeks, months or longer. A year before that, roughly 5,000 rooftop solar arrays had been installed across the island, and few of them had batteries. Today, the number is around 50,000 solar installations, the vast majority of which are hooked to batteries.

Meanwhile, Puerto Rican officials have launched a much slower, rockier effort to reform the island’s centralized electricity system.

In 2019, Puerto Rico’s government adopted a sweeping energy policy reform, called Act 17, that aims to accelerate adoption of large-scale renewables projects and improve the grid’s resilience in the face of extreme weather events. The act requires that 40 percent of the island’s electricity come from renewable sources by 2025, rising to 100 percent by 2050. That’s up from a mere 5 percent today.

As part of those reforms, Puerto Rico’s energy regulators ordered PREPA to solicit proposals and award contracts for clean energy projects in a series of ​“tranches.” Initially, PREPA officials expressed concerns that the technology was too complex or would require significant upgrades to the island’s telecommunications networks. Solar power developers chimed in to say that isn’t the case.

“It’s not going to be just a flick of a switch, but it’s a pretty low lift” in terms of the technology, said Chris Rauscher, senior director of market development and policy for San Francisco–based Sunrun. He noted that Puerto Rico is one of the fastest-growing markets for Sunrun, which operates VPP projects in New England, Florida and California.

Replacing dirty ​“peaker” plants with rooftop solar

Virtual power plants might take shape in a couple of ways on the island, Rauscher said.

Solar companies could add or update software on systems that they’ve already installed, giving companies more control over how and when the batteries send power to the grid. Alternatively, solar developers could install thousands of new systems designed to form a VPP from the get-go. In either case, participating households and businesses would likely be compensated for allowing access to their panels and batteries.

To better understand how VPPs can support the grid, it helps to imagine the colors of a stoplight, said McCrea Dunton, senior director of energy and grid services at Sunnova Energy.

If the grid is in a ​“green state,” or operating normally, the VPP can supply cheap solar electricity during hours of peak demand, when electricity from fossil-fuel-fired power plants tends to be most expensive. Not only does this reduce electricity costs — it also decreases use of the island’s oil-fired ​“peaker” plants that are used to supply extra power when demand is high or the grid is overtaxed. These aging facilities are situated near population centers and are significant sources of sulfur dioxide pollution, which can harm people’s respiratory systems.

“It’s an additional cost for ratepayers, both financially and health-wise, when there’s another option available,” said Meghan Nutting, Sunnova’s executive vice president of government and regulatory affairs.

The grid is in a ​“yellow state” when equipment failures or bad weather cause intermittent power outages or brownouts. In that case, a VPP can step in with extra power to provide another layer of resilience.

A ​“red state” is when the grid goes completely down. A VPP likely won’t be able to connect to the centralized system in that scenario. But the solar-and-battery systems can still provide power to the homes they’re attached to — or band together to form another type of clean-energy solution: a ​“microgrid.” Microgrids can connect systems on several or dozens of buildings, keeping lights on at a hyperlocal level.

Houston-based Sunnova has over 30,000 customers in Puerto Rico, the majority of whom lease their solar-and-battery systems. It is among a handful of companies that are closely monitoring Puerto Rico’s regulatory efforts to establish VPPs.

Rúa-Jovet, of the Solar and Energy Storage Association, said it’s possible that regulators will award only a fraction of the initial 150-megawatt VPP target. They might instead decide to start with smaller pilot projects so that utilities and regulators can grow more comfortable with the concept before establishing larger networks.

In the meantime, his organization will be advocating for bigger VPPs. ​“If you don’t turn on the most expensive and dirtiest peaker plants,” he said, ​“that’s just a win for society, economically and environmentally.”