Christopher Serju, Gleaner Writer
FOUR PATHS, Clarendon
JOHN CARBERRY, operations manager of Jamaica Broilers Ethanol Limited, says that capital outlay is reduced in the operation of solar-powered chicken farms because the system does not require a battery bank, which has traditionally been a major cost factor.
Instead, this system forces the operator to “make hay while the sun shines” during daytime when the energy demand is at its highest and revert to the national grid at nights when much less energy is needed.
Under this project, for which financing is provided by the Development Bank of Jamaica, commercial banks and other financial institutions, the solar equipment is used as the collateral, in what is effectively a lease system, with payback time of about five years.
Game changer
Alex Hill, managing director of Iree Solar, a full systems renewable energy developer and installer, sees this financial arrangement as a major game changer given that in Jamaica, the high start-up cost has long been a deterrent to the use of solar-energy systems. He explains the difference with traditional offerings where the farmer would have to put up his/her holdings as collateral: “Leasing equipment is very attractive to a company because you are able to write off the capital expenditure in its entirety, as well as interest expense, as an expense on your profit and loss. So you don’t have to take a loan with interest accruing, just a straight monthly payment.
“And on their sheet, as a profit and loss, they can write it off as an expense for which they get a tax benefit. This is different from a loan in which you are just taking an amount of money and paying an interest rate on it. So it’s a very attractive option for these farmers.”
However, Hill wants the Government to do more to make investing in solar systems more attractive as although the panels and inverters come in duty-free, there is still 20 per cent duty on solar water heaters, LED (light emitting diodes) lights and solar LED lights.
“These are items which the Government needs to address immediately if they are going to put out the message that they are going to be fostering renewable energy because duty is really hampering the uptake of this equipment,” said Hill.
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