This feature was done with grant support from the the Caribbean Energy Transition Reporting Initiative (CETRI).

St. John’s, Antigua – Electricity consumers in the Caribbean pay some of the highest tariffs in the world. With most refined petroleum imported from the United States, retail rates across the sub-region frequently reach nearly twice the U.S. average. Recurrent natural disasters and economic volatility further exacerbate this cost burden, threatening to widen the disparity.

Regional leaders have grown more conscious that the Caribbean’s fossil fuel-based energy model is economically, structurally, and strategically untenable.

This dependence emerged from decades of infrastructure choices that prioritized oil-based baseload generation over indigenous renewable resources.

Not long ago, doing laundry on small islands required no electricity at all. It happened at the riverside, early in the morning or late in the afternoon, when the sun softened and cool water ran over stone. Clothes were scrubbed by hand, rinsed downstream, and dried by wind and time. There were no metres ticking, no engines humming, no emissions drifting invisibly into the air.

Energy came from muscle, sunlight, and flowing water. No one called it sustainable. It was simply how life worked. But over time electrification changed that model.

“For decades, diesel was the fastest way to electrify islands and grids. And we had limited capital donors. But it was bankable, it was familiar, and we were able to deploy quickly,” recalls Dr Mohammad Rafik Nagdee, Executive Director of the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE).

That choice delivered convenience and modernization. But it also locked the region into high operating costs, external fuel dependence, and exposure to global market volatility. CCREEE’s Executive Director says energy has become an issue of security and development. It has exposed a hard reality that fossil fuels make us extremely vulnerable. 

Within CARICOM member states, conventional energy capacity exceeds renewable capacity by nearly 74 percent. According to the 2023 Energy Report Card (ERC), CARICOM countries can generate about 5,777 megawatts of electricity in total. Most of this electricity – about 5,016 megawatts – comes from conventional sources, such as diesel, oil, natural gas, or coal. Only about 761 megawatts comes from renewable energy, like solar, wind, hydro, or geothermal.

The implications are significant.

Most island grids rely heavily on a single imported fuel supplier. That concentration exposes utilities to price shocks, shipping disruptions, and foreign exchange pressures. When global oil prices rise, electricity tariffs follow. When supply chains tighten, islands face outages and fiscal strain. Compounding the risk is limited fiscal space.

Many Caribbean governments carry high debt burdens, leaving little room to absorb energy price volatility or independently finance large-scale clean energy infrastructure. This combination – fuel import dependence, concentrated suppliers, and constrained public finances – has created what energy experts describe as “structural exposure”.

Diversifying the energy mix

Dr Nagdee believes the answer to reducing those risks are in an integrated renewable energy grid using wind, sun, geothermal and a few other alternatives. “I don’t see that the Caribbean or the world will ever be non-reliant on fossil fuels. Our entire global economy is based on petrochemicals. But what we’re trying to do, especially from a Caribbean small land development state, is to reduce our reliance.”

Geothermal energy, particularly in the Eastern Caribbean, is widely viewed as a foundational opportunity because it can provide stable baseload power. Wind and solar, while variable, can supplement that supply when integrated with modern grid management and storage systems.

Some islands share similar seabed formations and lie in close geographic proximity, making subsea interconnection technically feasible. A phased approach linking neighbouring islands first and expanding outward could allow countries to share surplus renewable power and reduce duplication of expensive infrastructure.

The Caribbean Development Bank (CDB) is leading a regional interconnectivity study to assess the feasibility of such a network.

Dominica offers one of the clearest examples of geothermal ambition in the region. The island’s volcanic geology positions it to generate substantial renewable baseload electricity, potentially supplying both domestic demand and neighboring islands in the future.

The Cost Reality

Yet, renewable energy does not automatically translate into lower electricity bills – at least not immediately.

Large capital investments must be recovered. Power plant construction, grid upgrades, imported equipment, and financing costs are substantial. Small island economies typically face higher borrowing rates than larger markets, and debt servicing can delay consumer savings.

“There are also legacy costs,” Dr Nagdee notes. “If a utility has operated at a loss or carries historical debt, governments may not be able to reduce rates immediately, even when fuel costs decline.”

Fixed obligations under older power purchase agreements and import taxes on renewable equipment can further complicate cost recovery. This economic reality means policymakers must carefully manage public expectations.

In the interim, the CCREEE Director recommends targeted social protections such as subsidies for basic electricity needs alongside financing mechanisms that allow low- and middle-income households to access energy-efficient appliances, rooftop solar systems, and battery storage.

Clear interconnection rules, transparent rate structures, and strong consumer protection frameworks are also essential to ensure households and communities benefit alongside large commercial investors.

But ultimately, Dr. Nagdee emphasizes that the transition hinges on public trust.

According to Dr Nagdee, “there must be transparency, fairness, and inclusion. People need to understand not just what is happening, but why it is happening and what the long-term benefits are.”

Early wins, community engagement, transparent procurement, and consumer protection mechanisms were identified as essential to maintaining public buy-in. “The moment you have the trust of the people,” he says, “the transition becomes much easier.”

Innovation and Economic Transformation

Meanwhile, a growing cadre of regional experts is urging policymakers to think beyond conventional solar and wind deployments and consider next-generation systems that align energy transition with economic transformation.

Among them is Charlin Bodley, an energy specialist and engineer from St Lucia with 14 years’ experience in renewable energy, who works at the intersection of human capital development and the clean energy transition. Bodley argues that the transition must extend beyond megawatts and grid integration to workforce development and industrial participation.

In this video, she is joined by Dominican Dr. Byron Winston, an environmental scientist with expertise in water quality, climate change, resilience and sustainability, and more than 20 years of research and consulting experience. Winston is advancing a proposal that could reposition the region’s waste challenge as a renewable opportunity. At the centre of his proposal is a technology known as hydro-thermal liquefaction. 

But while Bodley supports innovation in waste-to-energy systems she urges caution.

Bodley’s and Dr Winston’s discussion is an example of the regional mindset and interconnectivity that Caribbean governments and regional institutions are all focused on achieving.

Emerging energy options

In addition to geothermal, wind, and solar, Caribbean policymakers are examining ocean energy, biogas, green hydrogen, and bioenergy derived from sargassum.

In 2026, near-shore ocean energy testing is expected to begin in several Caribbean islands, including Barbados, Grenada, and St. Vincent and the Grenadines, funded by the European Union (EU). However, ocean energy is unlikely to provide base-load power without significant battery storage. 

Green hydrogen is gaining traction, particularly within maritime and port operations, as international shipping regulations push toward decarbonization.

In Antigua and Barbuda, plans are under consideration to transform Rat Island near the St. John’s cargo port into a green fuel storage facility. Darwin Telemaque, Chief Executive Officer of the Antigua Port Authority and Chairman of the Port Management Association of the Caribbean (PMAC) has proposed constructing infrastructure to store green hydrogen, green ammonia, and other e-fuels. The country’s port decarbonization plan is estimated at approximately US$210 million.

Sharing the load

Despite advances in renewable technologies, the biggest barrier to adoption remains the cost of capital.

So for policymakers to determine which energy is best for their island to pursue, Dr Nagdee says that governments must clearly separate financial risk from energy security when deciding how quickly to invest in renewables such as solar, wind, and geothermal.

“Solar is relatively low risk,” he notes, explaining that it is modular, quick to install, and allows countries to see early progress. Wind energy can also be effective once sites are properly assessed for consistency. However, geothermal energy, while more complex and expensive at the outset, offers long-term price stability and reliability if proven viable.

So while private investment is essential to scaling renewable energy, it’s important for governments to initially lead the transition to reduce perceived risk, he explains. “Private sectors in the Caribbean are generally small and risk-averse. Governments have to demonstrate that renewable energy investments are viable and profitable over time.”

This is why blended finance, concessional loans, grants, and standardized power purchase agreements have become central tools. The objective is to make projects bankable not merely technically sound.

Antigua and Barbuda’s Ambassador for Climate Change, Ruleta Camacho-Thomas adds that for the private sector, the most direct contribution is efficiency. “Reducing demand is immediate and cost effective, better cooling, better buildings, smarter energy management,” she explains.

She says importantly, pursuing the energy transition pushes countries to modernise the power system. “As we add more renewables, we have to strengthen the grid and improve how we manage it. So the system is more stable day to day, and more resilient when extreme events hit.”

With each passing day, the urgency of transition is growing.

Dr. Nagdee identifies three principal risks if the region delays:

• Economic risk: continued exposure to volatile fuel markets, foreign exchange losses, and persistently high tariffs.
  
• Resilience risk: heightened vulnerability to supply disruptions and disasters.
  
• Sovereignty risk: limited national control over critical infrastructure.

“If we wait too long, the transition itself could become more expensive,” Dr Nagdee cautions.

The Caribbean once relied on sun, wind, and water out of necessity. Today, returning to those forces is no longer nostalgia. It is a strategy.

Redesigning Caribbean energy is not simply about replacing diesel generators. It is about restructuring economic exposure, strengthening resilience, and reclaiming control over the systems that power daily life.