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“Residential Generation” Legislation Opens Up Domestic Chilean Solar Market
Rame Energy Plc, the international power generator and engineering company, has issued an update with regards to its solar activities in Chile, following the passing of legislation by the Chilean Government which will open up the country’s domestic market for renewables and in particular, solar power.
The legislation comes into effect this week.
Highlights:
· Rame is ideally positioned to capitalise on the emerging domestic solar market considering its in-country experience and following the recent acquisition of solar installation company Beco
· “Residential Generators” in Chile are now able to connect renewable energy systems, such as solar, to the distribution system and receive payments for the surplus electricity they generate
o House-owners are highly incentivised to install renewable power solutions, fuelling growth in the domestic market
· Rame has entered into an MOU with Santiago School ‘Colegio Suizo de Santiago’ (“CSS”) to install their first ‘residential’ rooftop photo voltaic (“PV”) system
· Rame will install, own and operate a 25kW solar power plant for CSS, scheduled for commissioning in early 2015, and scope exists to extend the solar plant to a capacity of 300kW
Lilian Nunez, CEO of Rame’s South American Operations said “This legislation is the result of a participative process between various stakeholders, from government to distribution companies and independent power producers like Rame Energy. It provides a practical and workable framework that will ensure the domestic solar market will see huge growth. Through Beco Solar we have the immediate expertise and critical mass to allow us to be at the forefront of this new market and we are already designing our first rooftop systems that are covered by this new legislation.”
Rame CEO Tim Adams said “We are delighted to be at the vanguard of residential generation in Chile. We recognise the increasing importance of solar power across all our markets and have the expertise to deliver scalable solar engineering and construction solutions. The MOU with CSS marks our entry to this new generation market almost simultaneously with the announcement of the enabling legislation, demonstrating the strong positioning of Rame to react quickly to new energy opportunities in the country. As an additional benefit, we will have effected the transfer of Beco Solar’s installation capabilities into Chile with the prospect of a very substantial new installation business to target. Our dynamic response to new markets for both our engineering and generation activities continues to support our growth strategy as Rame remains focused on near term revenue and earnings.”
Residential Generation Legislation:
The Chilean government has sent another strong signal that it is committed to tackling its energy issues and sees renewable energy as a major contributor to its energy mix.
Renewables are already a major component in Chile’s utility scale market and, last week, the market was further extended by the publication of new legislation regarding Residential Generators. The new net metering laws will open up the domestic market for renewable, and in particular, solar power.
Residential Generators will be now able to connect renewable energy systems, such as solar and wind as well as co-generation plants, to the distribution system. The legislation, which comes into effect this week, recognises the value of local power production and grants all small scale users (under 100kW) the right to grid connection. This provides a strong financial imperative; not only will house-owners benefit from the reduction in power drawn from the grid; they will also receive payment for the surplus electricity they generate. Owners will ‘sell’ surplus electricity back to the grid (at regulated tariffs) in return for a proportionate reduction in their electricity bills, or, if the surplus value exceeds the bill, a VAT free payment which, critically, can accrue over time.
This provides a big incentive for families and businesses to install PV systems and the Directors believe it will lead to an expansion in the country’s rooftop solar market.
Additionally, under the new arrangements, smaller installations are not subject to the standard environmental protection procedures and the distribution companies will set the permitted installed capacity and be responsible for surplus injection readings. This makes the adoption of small scale PV systems relatively straightforward and therefore even more attractive to consumers.
