Energy Bureau restarts framework for community solar after grant cancellation.
- The San Juan Daily Star
- 3 hours ago
- 3 min read
By THE STAR STAFF
The Puerto Rico Energy Bureau (PREB) has re-initiated its regulatory proceeding to develop a comprehensive framework for community solar projects, following the cancellation of a key U.S. Environmental Protection Agency (EPA) grant that was originally intended to support a pilot program.
The action stems from the Energy Transformation and RELIEF Act (Act 57-2014), which mandates that the PREB, working in coordination with the Energy Public Policy Program of the Department of Economic Development and Commerce and the Independent Consumer Protection Office, establish regulations governing community solar projects and microgrids across the island.
When the PREB first launched the community solar proceeding in June 2025, its immediate focus was the design of regulations to support an EPA-funded pilot program. Two organizations -- Proyecto Enlace del Caño Martín Peña and La Alianza de Justicia Energética -- submitted supportive comments at that time. However, the subsequent cancellation of the EPA grant eliminated the funding that would have enabled the pilot program to move forward.
Despite the setback, the PREB said in an April 10 resolution that the loss of funding presents an opportunity to broaden the scope of the proceeding and develop a more robust regulatory record to guide long-term community solar development in Puerto Rico, consistent with its legislative mandate.
In announcing the renewed effort, the PREB highlighted the importance of community solar in improving the reliability, affordability, resilience and equity of Puerto Rico’s electrical system. The agency is now seeking wide-ranging input on alternative approaches to implementing community solar, particularly as they relate to different business and ownership models.
Among the ownership structures under consideration are utility-owned projects, member-owned cooperatives, third-party ownership, municipal ownership and non-profit ownership. Each model carries distinct implications for capital investment, cost recovery, pricing, governance and customer protections.
The PREB emphasized that governance frameworks will play a critical role in defining the obligations of community solar entities, regulatory authority, ratemaking structures and consumer safeguards. Geographic considerations -- such as whether community solar programs should have defined service boundaries or rely on virtual participation across regions -- are also part of the discussion.
The agency outlined several technical and operational factors that will influence how community solar projects integrate with the electrical grid. They include system configuration, communication and control capabilities, the potential use of ride-through inverters and energy storage, and how community solar facilities might provide grid support services that could be compensated.
Interconnection requirements and net energy metering (NEM) policies are also under review, given their historic role in expanding solar adoption in Puerto Rico. The PREB stated that the suitability of NEM as a compensation mechanism for community solar projects must be reexamined.
Pricing was identified as a central issue, affecting both wholesale and retail transactions. Community solar projects may sell electricity to private grid operator LUMA Energy, an aggregator, large customers through wheeling arrangements, or third parties. Retail pricing structures, including bill credits and capital cost recovery mechanisms, will vary depending on the business model adopted.
Participation models are another focal point of the proceeding. The PREB is considering both “opt-in” approaches -- where customers voluntarily enroll -- and “opt-out” approaches, in which customers are automatically enrolled but may choose not to participate.
Customer protection requirements, regulatory reporting obligations, and performance evaluation mechanisms will be shaped by the ownership and governance model selected. The energy regulator also underscored the importance of addressing distributional equity, noting that access to solar-plus-storage systems can create disparities between customers who can self-supply reliable power and those who remain fully dependent on the broader electrical system.
Low-income households, in particular, face barriers to achieving higher levels of reliability, and the PREB stated that community solar regulations must seek to minimize both cost and reliability inequities.
To guide the renewed effort, the PREB has engaged consulting firm KeyLogic to facilitate stakeholder discussions and prepare a report outlining regulatory options. The process will include written comments, workshops, draft and final reports, and opportunities for stakeholder feedback, culminating in the issuance of a draft community solar regulation and the start of formal rulemaking.
The PREB is inviting all interested stakeholders and members of the public to submit written comments on the questions included in Attachment A of the proceeding by this Friday, April 17. Submissions must reference “Community Solar Regulatory Framework, Case No. NEPR-MI-2025-0003” and may be filed electronically, by mail, or in person at the PREB’s offices in San Juan.