While most Caribbean islands are rapidly modernizing their electric grids, the modernization of transportation systems has lagged. Is change in the air? In November, for example, the government of Bermuda signed a memorandum of understanding with the Rocky Mountain Institute (RMI), embracing a plan to fully transition the island’s transportation sector to electric vehicles (EVs). Bermuda will kick off its transition by commissioning a fleet of electric public buses.
The case for EVs is strong in Bermuda, as it is across the Caribbean as a whole. With predominantly flat terrain and driving distances that are short enough to eliminate “range anxiety,” EVs make perfect sense. The abundant sunshine coupled with falling costs for solar energy translate into an ideal environment for a solar-powered EV ecosystem.
Why, then, aren’t Caribbean roads bumper-to-bumper with electric-powered vehicles? Chalk it up – in part – to politics and economics. As far as the numbers are concerned, high import tariffs in the region can add up to 100% of the vehicle’s cost at the point of purchase, making them prohibitively expensive to the consumer. On the political front, there are few enabling policies that would encourage drivers to make the switch from conventional gasoline-fueled vehicles to EVs.
Straddling both areas of concern is the fact that vehicle import tariffs represent valuable income sources for island governments. There is a hard choice to be made, then, between enjoying the short-term gain of funds from high vehicle tariffs and investing in the long-term benefits of reduced reliance on imported fossil fuels.
Beyond these challenges, there’s a wider issue at play. For islands to adopt EVs for a majority of the population – not just governments and the wealthy – we’ll need to see a new infrastructure ecosystem. That comes with implications for grid operators, and that comes with a price tag. Sure, EVs are perfectly suited to the Caribbean, but what are the real world implications for island utilities who will face fleets of cars interacting with existing generation infrastructure? And who’s going to pay for the infrastructure needed – island-wide charging stations, for example – to make a widespread transition possible? Those solutions don’t happen in a vacuum; they happen when governments, utilities and the private sector align on economic value and incentives. In a handful of markets across the Caribbean, that alignment is underway.
Take Barbados for example. Since Megapower Ltd. set up operations five years ago, the company has sold 300 EVs to individuals and organizations on Barbados, and has set up more than 50 charging stations and solar carports across the island. According to Jo Edghill, Managing Director of Megapower, partnerships have been key to their success, in particular the relationship forged with the island’s utility, Barbados Light & Power (BL&P). “Emera Caribbean/BL&P have recognized EVs a new revenue stream, and they’re one of our biggest partners,” said Edghill. Megapower has sold 10 vehicles to the utility, and BL&P have provided funding for public charging points which, in turn, says Edghill, “act as an important visibility tool highlighting that EVs are now part of the driving landscape in Barbados and beyond.”
Buoyed by their success in Barbados, Megapower is expanding into other Caribbean markets, aiming to duplicate the program on other islands.
The Barbados example demonstrates what’s possible when public and private sector stakeholders come together to achieve a common objective. We’re seeing the benefits of that alignment now and the makings of a paradigm shift in how Barbados gets itself from A to B. Other islands are about to embark on a similar journey. But let’s not pretend this is going to be easy. Just because the Caribbean is flat, and most of the islands are small, doesn’t mean that transformation will be painless. Stakeholders need to come to the table and do so willing to work together to align on economic benefits – and on investment. Get that right, and we may begin to see a domino effect in the region.