Rebates

In 2009, the Governor of Puerto Rico provided assurance that Puerto Rico would update its building energy codes as part of the state's application for State Energy Program funds from the American Recovery and Reinvestment Act (ARRA). Specifically, the Governor's Assurance assigned the Puerto Rican Energy Affairs Administration (EAA) the following responsibilities:

• Implement building energy codes for residential buildings that meet or exceed the International Energy Conservation Code (IECC 2009).
• Implement building energy codes for commercial buildings that meet the 2007 ANSI/ASHRAE/IESNA Standard 90.1, “Energy Standard for Buildings except Low-Rise Residential Buildings”
• Implement a plan to achieve compliance with the

The 2008 Economic Incentives for the Development of Puerto Rico Act (EIA) provides a wide array of tax credits and incentives that enable local and foreign companies dedicated to certain business activities to operate within Puerto Rico.

Businesses dedicated to the production of energy for consumption in Puerto Rico through the use of renewable sources are eligible companies under the EIA of 2008. In addition, businesses devoted to assembling equipment used to generate energy from renewable resources are eligible. The main economic incentives include:

• 4% fixed income tax rate for 15 years.
• Tax credit equal to 50% of the cost

In Puerto Rico, "bona fide farmers" are exempted from paying all types of excises for equipment, articles and objects whose operation depend solely on solar, wind, hydro or any other type of power, excluding the power produced by petroleum and its derivatives. A "bona fide farmer" is generally defined as a farmer certified by the government and who derives at least 50% of his or her gross income from the agricultural business as an operator, owner or lessee as declared in his or her income tax return.
It should be noted that that this exemption is part of a larger

Renewable and Efficient Energy Legislation

In July 2010, Puerto Rico enacted two important laws aimed at accelerating Puerto Rico's adaptation of renewable energy and to reduce the island's reliance on fossil fuels. This is especially significant since 70% of the island's electricity comes from oil, according to the government of Puerto Rico. Act 83 created the Green Energy Fund (GEF), which was (for the first time) a dedicated fund held separately from general funds to support renewable energy development in Puerto Rico. The GEF is unlike other public benefits funds in the United States since it is funded by excise (sales) taxes

With funding from Puerto Rico's Green Energy Fund, Tier I rebates are available for photovoltaic (PV) and wind systems up to and including 100 kW in capacity on a first-come, first-served basis.  Projects are eligible for a rebate up to 40% of installed costs, as long as the calculated dollar per watt installed cost is less than the Reference Cost. If project costs exceed the Reference Cost, the incentive will be calculated by using the Reference Cost. Note, higher Reference Costs are allowed in the Special Vieques-Culebra Economic Development Zone. The standard Reference Costs are:

• Photovoltaic (PV) less than or equal

NOTE: There is one application period per quarter. Applications must be submitted by the fifth day of each quarter (July 5, October 5, January 5, and April 5).  Incentives are expected to be available through June 30, 2015 or until funds are fully committed, whichever occurs first.

With funding from Puerto Rico's Green Energy Fund, Tier II competitive grants are available for photovoltaic (PV) and wind systems over 100 kilowatts (kW) and up to and including one megawatt (MW). Projects are eligible for up to 50% of installed project costs, although because this is a competitive grant, projects that request less

In 2007, the Autoridad de Energía Electrica de Puerto Rico (PREPA*) adopted interconnection standards based on the standard contained in the federal Energy Policy Act of 2005. PREPA promulgated interconnection rules in August 2008 that apply to all distributed generation (DG) projects that interconnect to PREPA’s electric distribution system. Interconnected systems must meet all safety and performance standards established by IEEE Standard 1547 as well as local construction and safety codes. A manual external disconnect switch is required for all interconnected systems.

Customer-generators seeking to interconnect first submit a standardized "Evaluation Request" to PREPA to determine whether or not the system

Puerto Rico enacted net-metering legislation in August 2007, allowing customers of Puerto Rico Electric Power Authority, now LUMA, to use electricity generated by solar, wind or "other" renewable-energy resources to offset their electricity usage.

The Puerto Rico Energy Public Policy Act of 2019 guaranteed availability of net metering for 5 years, and calls for a review of the program to be conducted by April 2024. Amendments to the Act by Ley 10-2024 delayed the review to 2030 and guaranteed net metering through the entire period.

Eligibility and Availability

This law applies to residential systems with a generating capacity of up

Puerto Rico provides a property tax exemption for all "solar powered material, equipment or accessory and renewable energy collection, storage, generation, distribution, and application equipment."  Renewable energy is defined per Ley 325-2004: solar, wind, hydro, biomass, ocean thermal, wave, tidal and other energy "whose use is clean, reliable, safe and sustainable."

Certification of Photovoltaic Equipment

PREPA specifies that PV equipment must meet UL 1703 requirements, and International Electrotechnical Commission (IEC) standards, as certified by a Nationally Recognized Test Lab. The manufacturer must guarantee that the equipment will be operating at minimum 80% capacity after 20 years. The EAA provides additional technical requirements for inverters and batteries.

Certification of Equipment for Generating Wind Energy

EAA specifies that a wind turbine must meet IEC standards including 61400-1, and if it is inverter integrated 61400-2, 61400-11 and UL Std. 1741. In addition, the manufacturer’s data sheet and a minimum 5-year warranty letter are required.

Note: Act No. 57-2014 requires PREPA to create a RELIEF plan regarding its obligation to efficiently generate electric power, various operational issues, and the integration of renewable energy.

Puerto Rico's Renewable Energy Portfolio Standard requires the Autoridad de Energía Eléctrica de Puerto Rico (Puerto Rico Electric Power Authority or PREPA)* to supply 100% of retail electricity sales from eligible renewable energy resources by 2050.

Eligible Technologies

Renewable energy resources fall into three categories. The first category is "Sustainable Renewable Energy," which includes solar, wind, geothermal, renewable biomass combustion, renewable biomass gas combustion, combustion of biofuel derived solely from renewable biomass

Puerto Rican law exempts from the sales and use tax solar electric equipment, associated accessories, and components used to produce electrical energy. Distributors or manufacturers must submit a certification to the Departamento de Hacienda (Puerto Rico's Department of Revenue) declaring that the solar electric equipment and associated components comply with the norms and specifications established by the Energy Affairs Administration (EAA). In addition, distributors or manufacturers must provide certification that the solar equipment is guaranteed for at least five years.

In October 2008, the Energy Affairs Administration (EAA) of Puerto Rico adopted regulations for the certification of photovoltaic (PV) systems and installers in response to the passing of Act No. 248, which required that PV systems be certified and installed by certified installers in order to be eligible for the newly established tax credits (that have since been repealed). With the passing of this regulation, only certified installers may install photovoltaic (PV) systems in Puerto Rico. In January 2010, additional regulations were passed that required wind turbine installers to be certified in order to install wind systems as well.

SOLAR

Puerto Rico offers a 30% tax deduction (up to $1,500) for expenses incurred in the purchase and installation of solar equipment to heat water for residential use. "Solar equipment" is defined as "any equipment capable of using solar energy directly or indirectly to heat water, whether such equipment is bought or manufactured by the taxpayer, provided that the same is operating." The deduction applies to those who lease or own the residential property.

An individual who claims the solar equipment deduction must enclose with his or her tax return a certificate stating that the solar equipment has been approved by