PRESENTATION Solar Hot Water Heater Industry in Barbados

PRESENTATION Solar Hot Water Heater Industry in Barbados Presented by: Dr. James Husbands Chief Executive Officer Solar Dynamics Ltd Barbados & St. Lucia SIDS DOCK-Swedish Energy Agency Project: Capacity Building and Institutional Strengthening Renewable Energy and Energy Efficiency (RE& EE) Strategy INCEPTION MEETING CURRICULUM DEVELOPMENT WORKING GROUP JUNE 1, 2017 BLUE HORIZONS GARDEN RESORT ST. GEORGE’S, GRENADA

Solar Hot Water Industry in Barbados offers a valuable example of how to successfully execute market implementation of a commercialized renewable energy technology § The SWH industry first emerged in Barbados in 1973 in response to oil prices increasing threefold in one year. At the time, fossil fuels supplied 95% of the country’s energy needs. In 1973, Canon Andrew Hatch of Christian Action for Development made a SWH using Professor Tom Lawand’s concept which was developed when Tom visited Barbados some 10 years earlier. The concept was to use readily available materials. An old oil drum was used for the storage tank, and bagasse for insulation. Andrew installed the system at his home. § Recognizing the need for marketing the systems, Bishop Drexel Gomez, Chairman of CADEC, invited a young businessman who had just started his business , to provide sales support to the fledging enterprise. James Husbands joined Solar Dynamics, the first SWH company on the island, and soon had the opportunity to demonstrate the technology to Prime Minister Tom Adams in his own home. Adams saw the benefit of the SWH when his annual gas consumption was reduced by 70%. With Husbands and Adams as local champions for SWH, momentum and public engagement around the initiative

Solar Hot Water Heater Industry in Barbados - The Challenge Barbados offers a valuable example of how to successfully execute market implementation of a commercialized renewable energy technology – challenges faced included but not limited to: § Access to startup capital. Despite having secured a government contract for SWH installations, the bank was unwilling to support Solar Dynamics first commercial installation to 84 homes at Oxnards, St. James , . § Lack of consumer awareness and confidence in solar technology. Developing an effective product and ensuring that the size and temperature of the SWH was appropriate for each household were crucial for gaining acceptance. § High upfront cost and inconsistent financial incentives to encourage consumers to invest in a new system. There is a history of fluctuating tax credits for SWHs in Barbados, including a complete removal of incentives from 1992 to 1994, resulting in suppression of industry growth.

Solar Hot Water Heater Industry in Barbados - Solutions The factors that led to Barbados successfully overcoming the market barriers to widespread implementation of SWHs were: § Local high-level government support /champions § Government purchases for Oxnards under Housing Minister Philip Greaves (DLP)(now Sir Philip). § Tax Incentive 1980, under Prime Minister Tom Adams. (BLP) § Widespread consumer acceptance § Temperature Guarantee which eliminated buyer risk.

Solar Hot Water Heater Industry in Barbados – Key Lessons § By 2009 there were around 45, 000 installed SWH systems in Barbados, or two in every five households. § Today, the SWHs designed in Barbados are sold throughout the region, and Barbados is recognized as a leader in the SWH field. One company alone, Solar Dynamics, has installed more than 30, 000 units on homes and businesses across the Caribbean. Solar Dynamics established Solar Dynamics EC Ltd in Saint Lucia in 1993. § Local finance partners can establish channels of funding for pioneering companies that are struggling to access credit § Financial incentives, such as tax credits, can help manufacturers and consumers adopt new technology § A stable regulatory framework can provide confidence for investors and consumers

Solar Hot Water Heater Industry in Barbados – Key Lessons § High-quality products supported by an enthusiastic, locally sensitive marketing strategy will build consumer awareness of the benefits of new technology. § Manufacturer or supplier performance guarantees reduce consumer risk and facilitate deployment. § Consumer credit schemes from manufacturers, distributors, or installers can lower initial entry costs to consumers.

Key Elements of the Support Framework for the SWH Industry in Barbados

THANK YOU!