No Carbon for Me, Costa Rica

July 1, 2009

Part I of a two part series exploring solar power options for homes and businesses in Costa Rica:  www.osawaterworks.com

This essay was published July 9, 2009 by www.sellingcr.com under the title Alternative energy sources for homes in Costa Rica

Costa Rica has joined Sri Lanka, the Maldives, New Zealand, Norway, Iceland, and Monaco in what is being called the CO₂ World Cup:  the race to become the world’s first carbon neutral nation.  In order to reach this lofty goal by its target date of 2021, Costa Rica must reduce its fossil fuel combustion and offset what cannot be eliminated with carbon sequestration, such as through the planting of trees or the scrubbing of industrial emissions.

With eco-tourism comprising the nation’s largest domestic industry and its greatest source of gross national product, the bid for carbon neutrality is not only a platform for global environmental leadership but a shrewd investment in the nation’s own economic future as the world’s standard-bearer of eco-tourism.  Costa Rica’s domestic air carrier, Natureair, already boasts that it is the world’s first carbon-neutral airline.  Costa Rica cannot plant its way to carbon neutrality but must dramatically reduce the combustion of fossil fuels within its borders.  A significant source of Costa Rican oil combustion is in the production of electricity in its Moín oil-burning facilities in the region of Limón.  The table below shows the estimated breakdown of electrical power sources in Costa Rica.

Power Source	Percentage
Hydroelectric	81%
Oil	8%
Wind	8%
Geothermal	3%
Solar	0%

Costa Rica’s effort to reduce its percentage of oil-based power predates the nation’s declared ambition toward carbon neutrality.  The tiny Central American nation has no hydrocarbon reserves of its own and imports all its crude from Venezuela, and the ongoing drives toward hydrocarbon independence were originally motivated by the need to reduce this trade imbalance.  Even as the nation’s power demands have increased annually by an average of 6% (dropping to 2% expansion in 2008 as a result of the global recession), the overall contribution of oil has been offset by the expansion of wind and hydroelectric plants, many of these private co-generation projects.  Still, scrubbing crude oil from the nation’s electrical power budget is a task far easier than banning the hydrocarbon from the nation’s roadways, and it is impossible to imagine Costa Rica reaching carbon neutrality without mothballing its oil-burning plants altogether and displacing the remaining 8% of the nation’s power supply with abundant, renewable, small-scale solar, wind, and hydroelectric production.

Since Germany’s passage of its ground-breaking Renewable Energies Law in April, 2000, the nation has added 3800 megawatts of solar power to its national grid.  In so doing, solar power has in the interim grown to provide a full one percent of the nation’s electrical power supply, and experts project this component to grow to 25% by the year 2050.  The law requires the German national grid to purchase power from small-scale net producers, and its implementation in the cloudy, northern-latitude nation has turned Germany into the world’s largest installer of residential solar power and placed that nation at the forefront of the world’s green revolution.  This has brought down the capital costs of solar systems in Germany, reduced the price of electricity, and reduced the nation’s carbon footprint, leading to a win-win-win national energy dynamic, propelling the German population to take nearly as much pride in their energy progressivism as in their beloved Bundesliga.

With the nearly constant twelve-hour days in low-latitude Central America and sunlight’s more direct angle of incidence, Costa Rica is considerably more amenable to widespread solar power development than is Germany.  On its path to carbon neutrality, Costa Rica has little choice but to follow Germany’s example in liberalizing its energy policies to stimulate the spread of small-scale carbon-free grid-tie power production wherever possible. 

While the legislation of a feed-in fixed tariff micro-generator energy law would immediately change the economics of residential solar power, recent increases in electrical rates have businesses and homeowners alike scratching their heads and puzzling over the economics of adding solar power right now.  Still, the average payback period of a mid-sized residential home is about fifteen years, and around ten years for businesses.  For remote homes with no access to the grid, there is no alternative but a fossil fuel generator, so these payback period estimates have no bearing off the grid, but for homes and businesses connected to the grid, this lengthy payback period remains an impediment to investment of the $20-30,000 that a mid-sized alternative power energy system typically requires.

Costa Rica already has alternative-energy incentives on its books.  For the consumer interested in installing solar power, for instance, the nation does not charge import tariffs on any alternative energy equipment.  This means that solar panels, batteries, inverters, wind turbines, hydroelectric equipment may all be imported into the country with no fee or duty other than the 13% national sales tax and the cost of shipping.  In addition to this non-trivial incentive for small-scale power production, the nation is in the process of untying its Gordian knot of environmental permitting bureaucracy for small-scale hydroelectric generators, signaling a readiness for widespread micro-hydroelectric approvals.  Costa Rica has for two decades been actively encouraging the development of private wind farms and as a result is one of the world’s leading wind power generators (measured as a percentage of total power production).  While geothermal power was the original alternative energy mainstay of this nation, the challenges of brine disposal and the high costs of this power source are likely to see geothermal gradually eclipsed by its less costly and less polluting alternatives of hydro, wind, and solar.

For homeowners or developers with deep pockets, absolute carbon neutrality at the residential level is easily within reach and simply a question of capital investment.  And even for budget systems, the increase in ICE electricity rates and decrease in solar power equipment costs makes the payback period less and less each ensuing year.  Until grid-tie power trading is legislated, however, the capital costs of a solar power system will not compare attractively for locations with access to the grid except at payback periods of usually ten years or more.  The abundance of high-end remote off-grid homes, on the other hand, ensures that even without grid-tie legislation, alternative energy will always be an important part of the nation’s overall power platform and arguably the best option in all of Costa Rica’s most beautiful places.

Part two of this solar mini-series will focus on the nuts and bolts of residential solar power development for small, medium, and large Costa Rican households both on and off the grid, the costs, and helpful tips on how to make a transition to an alternative energy lifestyle in Costa Rica.   Stay tuned.

This is an editorial.  This is only an editorial.  Had this been an actual fact you would have been advised to withdraw to your nearest fact shelter to await further instructions.  We repeat.  This is only an editorial.  If you wish to add your own two cents to this debate, you may mail me here.

EDITORIAL HOME