Sector Snapshot: Renewable Energy & Distributed Power Systems
The Caribbean as a Clean Energy Proving Ground
The Caribbean faces some of the highest electricity costs in the world, ranging from $0.30 to $0.50 per kilowatt-hour, primarily due to heavy dependence on imported fossil fuels [1]. This economic burden affects households, businesses, and governments alike, while also increasing vulnerability to global fuel price fluctuations. At the same time, the region is highly exposed to climate change impacts, including stronger hurricanes, rising sea levels, and increasing temperatures. These realities have intensified the urgency for transitioning to renewable energy sources such as solar, wind, geothermal, and biomass. The combination of high energy costs, abundant renewable resources, and climate vulnerability makes the Caribbean an ideal testing ground for distributed energy systems and clean power innovations.
The Challenge: Transitioning from Fossil Fuels to Clean, Resilient Energy Systems
Caribbean energy infrastructure is largely centralized and dependent on aging power plants fueled by imported diesel and heavy fuel oil. These systems are costly, environmentally harmful, and vulnerable to extreme weather disruptions. Small island grids often struggle to integrate renewable energy due to limited technical capacity, regulatory barriers, and financing constraints. Many communities also lack access to reliable electricity, particularly in rural or remote areas. There is a critical need for affordable renewable generation technologies, smart grid systems, energy storage solutions, microgrids, and innovative financing models to accelerate the region's energy transition.
| Challenge Area | Description | Startup Opportunity |
|---|---|---|
| High Energy Costs | Reliance on imported fossil fuels leads to expensive electricity. | Solar and wind generation systems, community energy projects, and energy-as-a-service platforms. |
| Grid Resilience | Centralized grids are vulnerable to storms and outages. | Microgrid technologies, battery storage systems, and smart grid management software. |
| Renewable Integration | Technical and regulatory barriers limit renewable adoption. | Grid optimization tools, renewable forecasting software, and compliance platforms. |
| Energy Access | Some communities lack reliable electricity supply. | Off-grid renewable systems, pay-as-you-go solar solutions, and decentralized power networks. |
Scalability: From the Caribbean to the World
Clean energy solutions proven in the Caribbean's small, distributed island grids can be readily scaled to other regions facing similar challenges. These include remote communities in Africa, island nations in the Pacific, rural Latin America, and emerging markets with weak grid infrastructure [2]. The global renewable energy market is expected to surpass $2 trillion annually by 2030, driven by declining technology costs and increasing climate commitments [3]. Caribbean-born clean energy startups can leverage their experience in high-cost, climate-vulnerable environments to expand into these rapidly growing global markets.
References
[1] IDB (2025), ONE Caribbean Framework, Inter-American Development Bank, Washington, D.C.
[2] IEA (2022), World Energy Outlook, International Energy Agency, Paris, France.
[3] BloombergNEF (2023), New Energy Outlook, Bloomberg New Energy Finance.