Powering a Sustainable Future in Puerto Rico
Solar thermal electric, photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal electric, municipal solid waste, hydrogen, tidal energy, wave energy and ocean thermal power generation. These are just a few of the renewable energy sources that Puerto Rico has its sights set on attracting to the island through a series of powerful incentive programs.
Strong incentives have existed in Puerto Rico since 2008 for the manufacture of renewable energy equipment. Also, the island passed legislation promoting the generation of renewable energy, aimed at drastically cutting back its dependence on fossil fuels for its energy needs.
The 2008 Economic Incentives for the Development of Puerto Rico Act, known as Law 73, provides local and foreign companies that manufacture and/or assemble renewable energy equipment with a wide array of tax incentives and credits, including:
Laws to Spur Renewable Energy Projects
In July 2010, additional legislation – Laws 82 and 83 – was passed to help the island meet its target of 15% renewable energy production by 2020 and 20% by 2035. The Renewable Portfolio Standard (RPS) requires the island's retail energy providers to produce or purchase a specified percentage of their electricity from renewable energy sources.
The legislation also calls for the Government of Puerto Rico to co-invest $290 million in renewable energy projects and other initiatives over the next 10 years through a Green Energy Fund (GEF). The fund started with a $20 million injection in 2011. Through the GEF, the Puerto Rico Energy Affairs Administration will offer cash rebates of up to 60 percent for individuals, and 50 percent for companies, on the cost of installing residential and industrial projects not exceeding 1 MW of capacity.
For companies dedicated to the production of renewable energy on a commercial scale, the new Incentive Act also provides tax benefits in the form of significant partial exemptions from income taxes, property taxes, and municipal taxes; super-depreciation of buildings, structures, machinery, and equipment; and eligibility for tax-credits related to the use of locally-manufactured products, job creation, and research and development.